dc.description.abstract | In this paper, we investigate technological developments in the financial market
and whether the Norwegian stock market has become more efficient. Explaining
efficiency in the market, we apply a price-synchronicity measure, R-squared,
proposed by Richard Roll (1988) and evaluate the alphas of the yearly regression
models. Further, to explain how stocks adjust to new information, in the short
term, we use event studies. Based on the price-synchronicity measure, we find
no evidence that the market has become more or less efficient. However, based
on the cumulative average abnormal return (CAAR), we find that the standard
deviation is significantly lower in the period from 2008-2018 compared to 1997-
2007. Our conclusion is, therefore, that the Norwegian stock market has become
more efficient. We identify three key characteristics that technology could have
influenced market efficiency; increased availability of information, reduction of
trading costs and lower barriers, and existence of broad base of investors. | nb_NO |