Pankaj K. Jain
We document the profound impact of technology on the functioning of financial markets around the world. Specially, we report a strong trend towards fully automated trading systems. This trend is associated with a significant decline in the cost of equity capital. These findings are consistent with the notion that computerization enhances liquidity, informativeness, and valuations in the stock markets. These results have practical significance for investors routing their trades, firms choosing their listing venues, stock exchanges crafting their competitive organizational strategies, and regulators contemplating policy initiatives.