Tick Sizes, Stock Prices, and Share Turnover: International Evidence
We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.
Finance and General Business
tick size, stock price level, srading volume, decimalization
Dyl, Edward A., H. Douglas Witte, and Larry R. Gorman. "Tick sizes, stock prices, and share turnover: International evidence." Studies in Economics and Finance (2002).