The abrogation of the “Impôt sur les opérations de bourse” did not foster the French stock market

- From 1893 to 2007, a securities transaction tax was levied in France.
- With globalization, the implicit tax rate regularly decreased.
- Contrary to expectations, the abrogation of the tax did not boost the French market.
- The design of securities transaction tax is crucial.

Between 1893 and 2007, a securities transaction tax (“Impôts sur les opérations de bourse”) was levied on the French market. In this paper, I assess the impact of the tax abrogation. Using a difference-in-difference approach, I find no impact on market liquidity and volatility.