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We study the effect of algorithmic trading (AT) on market quality between 2001 and 2011 in 42 equity markets around the world. We use an exchange colocation service that increases AT as an exogenous instrument to draw causal inferences about AT on market quality. On average, AT improves liquidity and informational efficiency but increases short-term volatility. Importantly, AT also lowers execution shortfalls for buy-side institutional investors. Our results are surprisingly consistent across markets and thus across a wide range of AT environments. We further document that the beneficial effect of AT is stronger in large stocks than in small stocks.

Using NYSE short-sale order data, we investigate whether short sellers’ informational advantage is related to firm earnings and analyst-related events. With a novel decomposition method, we find that while these fundamental event days constitute only 12% of sample days, they account for over 24% of the overall underperformance of heavily shorted stocks. Importantly, short sellers use both public news and private information to anticipate news regarding earnings and analysts. Shorting’s predictive ability remains significant after controlling for information in analyst actions and displays no reversal patterns, indicating that short sellers know more than analysts, and the nature of their information is long term.

Three‐dimensional (3D) reconstruction and texture mapping of buildings or other man‐made objects are key aspects for 3D city landscapes. An effective coarse‐to‐fine approach for 3D building model generation and texture mapping based on digital photogrammetric techniques is proposed. Three video image sequences, two oblique views of building walls and one vertical view of building roofs, acquired by a digital video camera mounted on a helicopter, are used as input images. Lidar data and a coarse two‐dimensional (2D) digital vector map used for car navigation are also used as information sources. Automatic aerial triangulation (AAT) suitable for a high overlap image sequence is used to give initial values of camera parameters of each image. To obtain accurate image lines, the correspondence between outlines of the building and their line features in the image sequences is determined with a coarse‐to‐fine strategy. A hybrid point/line bundle adjustment is used to ensure the stability and accuracy of reconstruction. Reconstructed buildings with fine textures superimposed on a digital elevation model (DEM) and ortho‐image are realistically visualised. Experimental results show that the proposed approach of 3D city model generation has a promising future in many applications.

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