ABSTRACT
Our study asks whether the investment companies gain the advantage of the physical location towards European recognized financial markets. To investigate our research issue, we used a sample of 380 entities and 3,800 firm-yearly observations across European countries. Our research window covers the 2010 to 2019 timeframe. The study uses a dynamic panel regression with the difference and system generalized method-of-moments. Our finding shows that there is no statistically significant correlation between the company's physical distance to the stock exchange and their return on assets. This may result from the fact, that the high-frequency trading market in the European Union is dominated by a few market players who gain a competitive advantage through the technological development enhancement of the quotation tick and narrowing transaction execution timing.
