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Stock liquidity and firm value: evidence from China |
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| Authors: | Lijie Zhang Yong Li Zhuo Huang |
| Affiliation: | 1. Hanqing Advanced Institute of Economics and Finance, Renmin University of China, Beijing, P.R. China;2. National School of Development, Peking University, Beijing, P.R. China |
| Abstract: | Empirical evidence for the effect of stock liquidity on firm value is limited and mixed due to a severe endogeneity problem. This article adds to the literature on this topic by providing new empirical evidence using the nontradable share reform in China as a quasi-natural experiment. Our results show that higher stock liquidity can lead to significant firm value improvement. |
| Keywords: | Stock liquidity firm value nontradable share reform quasi-natural experiment |