First draft : November 1 , 2004 This draft : May 19 , 2006 Transparency and Liquidity : A Controlled Experiment on Corporate Bonds

@inproceedings{Babson2006FirstD,
  title={First draft : November 1 , 2004 This draft : May 19 , 2006 Transparency and Liquidity : A Controlled Experiment on Corporate Bonds},
  author={Michael A. Goldstein Babson and Tomasso Hall Babson Park and M. Goldstein and Edith S. Hotchkiss Boston College Fulton Hall},
  year={2006}
}
This paper reports the results of an experiment designed to assess the impact of last-sale trade reporting on the liquidity of BBB corporate bonds. Overall, adding transparency has either a neutral or positive effect on liquidity. Increased transparency is not associated with greater trading volume. Except for very large trades, spreads on newly-transparent bonds decline relative to bonds that experience no transparency change. However, we find no effect on spreads for very infrequently traded… CONTINUE READING