An analysis of over-the-counter and centralized stock lending markets

Zsuzsa R. Huszár, Melissa Porras Prado

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)
31 Downloads (Pure)


We provide new insights about centralized and OTC stock lending in the context of Tokyo Stock Exchange listed stocks from July 2006 to December 2009. We find that not only the demand drivers in the two markets are significantly different but also the pricing efficiency implications of the alternative markets are different. Specifically, we find that higher OTC stock lending activity is associated with greater pricing efficiency and better liquidity. The benefits of the centralized market on average is less clear, but when the OTC market is constrained, it is shown to relax short-sale constraints and improve liquidity.

Original languageEnglish
Pages (from-to)31-53
JournalJournal Of Financial Markets
Publication statusPublished - Mar 2019


  • Pricing efficiency
  • Short selling
  • Stock lending


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