L1 - Market Structure, Firm Strategy, and Market Performance

• Retail Order Flow Segmentation

  Staff Working Paper 2016-20 Corey Garriott, Adrian Walton

  In August 2012, the New York Stock Exchange launched the Retail Liquidity Program (RLP), a trading facility that enables participating organizations to quote dark limit orders executable only by retail traders.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial system regulation and policies, Market structure and pricing JEL Code(s): G, G1, G14, G2, G20, L, L1, L10

• Trends in Firm Entry and New Entrepreneurship in Canada

  Staff Discussion Paper 2015-11 Shutao Cao, Mohanad Salameh, Mai Seki, Pierre St-Amant

  Recently released data show downward trends for both the firm entry rate and the rate of new entrepreneurship since the early 1980s in Canada. This paper documents these trends and discusses potential explanations.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Firm dynamics, Market structure and pricing, Productivity JEL Code(s): L, L1, L11, M, M1, M13

• Public Policy Objectives and the Next Generation of CPA Systems: An Analytical Framework

  Staff Discussion Paper 2015-6 James Chapman, Jonathan Chiu, Sajjad Jafri, Héctor Pérez Saiz

  The payments landscape in Canada is rapidly changing and will continue to evolve, fuelled by strong and persistent drivers. In Canada, the Canadian Payments Association (CPA) is on a path to modernize Canada’s core payment systems.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, L, L1, L14, L15, L5, L52

• The Endogenous Relative Price of Investment

  Staff Working Paper 2015-30 Joel Wagner

  This paper takes a full-information model-based approach to evaluate the link between investment-specific technology and the inverse of the relative price of investment. The two-sector model presented includes monopolistic competition where firms can vary the markup charged on their product depending on the number of firms competing.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles JEL Code(s): E, E3, E32, L, L1, L11, L16
• November 13, 2014

  Firm Strategy, Competitiveness and Productivity: The Case for Canada

  Bank of Canada Review - Autumn 2014 Lori Rennison, Farid Novin, Matthieu Verstraete

  At a time when the Bank is expecting a rotation of demand toward exports and investment, and transformative global trends are placing increasing emphasis on innovation, technology and organizational learning, an understanding of the competitiveness strategies of Canadian firms and the factors affecting them has become particularly relevant. This article summarizes findings from a Bank of Canada survey of 151 firms designed to extract signals on elements of firm strategy and organizational capital in order to help inform the macroeconomic outlook.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Business fluctuations and cycles, Monetary policy and uncertainty, Potential output, Productivity JEL Code(s): D, D2, D23, D24, E, E2, E22, F, F2, F20, L, L1, L10, L2, L20, M, M1, M10, O, O3, O31, O4, O47

• On the Importance of Sales for Aggregate Price Flexibility

  Staff Working Paper 2014-45 Oleksiy Kryvtsov, Nicolas Vincent

  Macroeconomists have traditionally ignored the behavior of temporary price markdowns (“sales”) by retailers. Although sales are common in the micro price data, they are assumed to be unrelated to macroeconomic phenomena and generally filtered out.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Inflation and prices, Market structure and pricing, Monetary policy transmission JEL Code(s): E, E3, E31, E32, E5, E52, L, L1, L11, L2, L25, L8, L81, M, M3, M31

• Competition in the Cryptocurrency Market

  Staff Working Paper 2014-33 Neil Gandal, Hanna Halaburda

  We analyze how network effects affect competition in the nascent cryptocurrency market. We do so by examining the changes over time in exchange rate data among cryptocurrencies.

  Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech JEL Code(s): L, L1

• Filling in the Blanks: Network Structure and Interbank Contagion

  Staff Working Paper 2014-26 Kartik Anand, Ben Craig, Goetz von Peter

  The network pattern of financial linkages is important in many areas of banking and finance. Yet bilateral linkages are often unobserved, and maximum entropy serves as the leading method for estimating counterparty exposures.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial institutions, Financial stability JEL Code(s): C, C6, C63, D, D8, D85, G, G2, G21, L, L1, L14

• High-Frequency Trading Competition

  Staff Working Paper 2014-19 Jonathan Brogaard, Corey Garriott, Anna Pomeranets

  We analyze trading dynamics as successive high-frequency trading (HFT) firms begin to trade stocks in an equity market. Entrants compete with incumbents for volume, and there is crowding out.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Market structure and pricing JEL Code(s): G, G1, G14, G2, G20, L, L1
• November 14, 2013

  Fragmentation in Canadian Equity Markets

  Bank of Canada Review - Autumn 2013 Corey Garriott, Anna Pomeranets, Joshua Slive, Thomas Thorn

  Changes in technology and regulation have resulted in an increasing number of trading venues in equity markets in Canada. New trading platforms have intensified price competition and have encouraged innovation, and they do not appear to have segmented trade. But the increasingly complex market structure has necessitated investments in expensive technology and has introduced new operational risks. Regulatory responses should be carefully adapted to retain the competition and innovation associated with this market fragmentation.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G2, L, L1, L13, N, N2, N22