The Impact of Post-Trade Transparency on Investors: Evidence from an Emerging Market

Abstract

This study examines the effects of a post-trade transparency event on the payoff to informed and uninformed traders of large and small size firms. The evidence indicates that the event leads to a significant decrease in the payoff only to informed traders of large firms, while there is little change in the payoff to other investors. The implications are two-fold, that the event is beneficial to market fairness for large firms although it has the drawback of discouraging informed traders from producing/sharing information; and secondly, the event has no universal and equivalent impact for different groups of investors.