Using euro conversion as the trigger, we examine what drives volume and spread changes when stock exchanges compete. Results show average trading costs on European exchanges decrease almost 9%, and turnover increases over 30%. Trading costs decline or remain unchanged on all exchanges, but...

We examine how euro conversion affected trading costs and volume in European equity markets. Euro conversion immediately changed tick sizes and price transparency, both of which could affect trading costs and relative trading volume. Longer-run, conversion could boost competition among...