At least 60 new equity exchanges have been created globally since 1990, and a significant proportion of global trading is executed on financial exchanges not covered by existing research. This paper sets out to explore why financial exchanges exist, which trading mechanisms are likely to survive within particular economic environments, and what impact financial exchanges have on the domestic economy. Authors Matthew Clayton of University of Virginia (previously of Rutgers University), Bjorn Jorgensen, Gary Winnick and Martin Granoff Associate Professor of Business at Columbia Business School, and Kenneth A. Kavajecz of the University of Wisconsin-Madison, investigate the cross-section of 256 financial exchanges throughout the world. First, they empirically analyze the country characteristics that are related to having a financial exchange. Second, they investigate the determinants of an exchange's choice of trading mechanism, and third, they examine whether the presence of an exchange in a country impacts the domestic country's economy. The authors find that the main determinants for an exchange to exist in a country are the size of the economy, trade policy, foreign investment, development of the banking sector and the legal system. Their results show that the choice of trading mechanism depends on the number of assets traded and the legal system. Lastly, they find that the presence of an exchange is associated with a reduction in the growth of the monetary aggregates, but is not associated with other measures of domestic growth and productivity.