Terrence Hendershott
· Professor | Willis H. Booth Chair in Banking and Finance IIUniversity of California, Berkeley · Fintech
Active 2000–2025
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About
Terrence Hendershott is the Willis H. Booth Chair in Banking and Finance at UC Berkeley Haas School of Business and serves as the Faculty Director of the Master of Financial Engineering Program. His work spans a range of financial instruments trading on exchanges and over-the-counter in the U.S. and internationally. He is an expert on the structure, design, and regulation of financial markets and investigates how market participants such as market makers, high-frequency traders, and institutional investors influence price discovery and liquidity. His research also focuses on the competition between electronic and traditional markets and the role of information technology in those markets. Hendershott has chaired the NASDAQ Economic Advisory Board and served as a visiting economist at the New York Stock Exchange. His numerous honors include best paper awards from the Review of Financial Studies and the Financial Review, as well as awards from NYSE and NASDAQ for work on equity trading and market microstructure. Since 2001, he has held various positions at Haas, including faculty director and endowed chair, and has been recognized for his contributions to understanding market microstructure, electronic trading, and financial market regulation.
Research topics
- Computer Science
- Econometrics
- Statistics
- Economics
- Mathematics
- Computer Security
- Financial economics
- Monetary economics
- Business
- Finance
Selected publications
Price Discovery without Trading: Evidence from Limit Orders
The Journal of Finance · 2019-03-19 · 257 citations
articleABSTRACT We analyze the contribution to price discovery of market and limit orders by high‐frequency traders (HFTs) and non‐HFTs. While market orders have a larger individual price impact, limit orders are far more numerous. This results in price discovery occurring predominantly through limit orders. HFTs submit the bulk of limit orders and these limit orders provide most of the price discovery. Submissions of limit orders and their contribution to price discovery fall with volatility due to ch…
FinTech as a Game Changer: Overview of Research Frontiers
Information Systems Research · 2021 · 200 citations
1st authorCorrespondingTechnologies have spawned finance innovations since the early days of computer applications in businesses, most recently reaching the stage of disruptive innovations, such as mobile payments, cryptocurrencies, and digitization of business assets. This has led to the emerging field called financial technology or simply FinTech. In this editorial review, we first provide an overview on relevant technological, pedagogical, and managerial issues pertaining to FinTech teaching and research, with a fo…
Asset pricing: A tale of night and day
Journal of Financial Economics · 2020 · 140 citations
1st authorCorrespondingRelationship Trading in Over‐the‐Counter Markets
The Journal of Finance · 2019-11-15 · 135 citations
article1st authorCorrespondingABSTRACT We examine the network of trading relationships between insurers and dealers in the over‐the‐counter (OTC) corporate bond market. Regulatory data show that one‐third of insurers use a single dealer, whereas other insurers have large dealer networks. Execution prices are nonmonotone in network size, initially declining with more dealers but increasing once networks exceed 20 dealers. A model of decentralized trade in which insurers trade off the benefits of repeat business and faster exe…
The Journal of Finance · 2024 · 85 citations
ABSTRACT In statistics, samples are drawn from a population in a data‐generating process (DGP). Standard errors measure the uncertainty in estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence‐generating process (EGP). We claim that EGP variation across researchers adds uncertainty—nonstandard errors (NSEs). We study NSEs by letting 164 teams test the same hypotheses on the same data. NSEs turn out to be sizable, but smaller for more reproducible…
Recent grants
CAREER: Electronic Trading Systems
NSF · $375k · 2002–2008
Frequent coauthors
- 49 shared
Charles M. Jones
- 46 shared
Carole Comerton‐Forde
University of Melbourne
- 43 shared
Pamela C. Moulton
- 39 shared
Mark S. Seasholes
William Carey University
- 21 shared
Norman Schürhoff
Swiss Finance Institute
- 20 shared
Michael J. Barclay
University of Rochester
- 19 shared
Ryan Riordan
- 18 shared
Albert J. Menkveld
Vrije Universiteit Amsterdam
Education
- 1985
Ph.D., Economics
University of California, Berkeley
- 1981
M.S., Economics
University of California, Berkeley
- 1978
B.A., Economics
University of California, Los Angeles
Awards & honors
- Michael J. Brennan Best Paper Award (2014)
- Financial Review Outstanding Publication Award (2014)
- Philip Brown Prize (2013)
- New York Stock Exchange Euronext Award (2001, 2008)
- Nasdaq Award for best paper on market microstructure (2007)
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