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| Can NEEQ Market Making Improve Liquidity? From the Perspective of Liquidity Paradox |
| ZHENG Jianming, LI Jintian, LIU Lin
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School of Business, University of International Business and Economics;
School of Economics and Management, Beijing University of Chemical Technology |
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Abstract Based on the data of 1542 listed firms for the period of 2014-2016 and the DID method, this paper takes the implementation of market maker system in NEEQ market as research background to study the impact of choosing market making on liquidity. We find that the market maker system has not improve the liquidity, which suffers from “Liquidity Paradox”.It’s favorable for the large-cap stocks if they choose market making transaction, while it is unfavorable for small-cap stocks. Therefore, NEEQ should focus on the matching of trading system development and market regulation, increase the number of market makers, and lead the companies to choose market making transaction.
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Received: 28 March 2017
Published: 01 November 2018
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