Investor Protection and Firm Liquidity  

Oleh:

Brockman, Paul ; Chung, Dennis Y.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 58 no. 2 (Apr. 2003), page 921-937.
Fulltext: p 921.pdf (174.03KB)

Isi artikel

The purpose of this study is to investigate the relation between investor protection and ¢rm liquidity.We posit that less protective environments lead to wider bid-ask spreads and thinner depths because they fail to minimize information asymmetries.The Hong Kong equity market provides a unique opportunity to compare liquidity costs across distinct investor protection environments, but still within a common trading mechanism and currency. Our empirical ¢ndings verify that firm liquidity is significantly a¡ected by investor protection. Regression and matched-sample results show that Hong Kong-based equities exhibit narrower spreads and thicker depths than their China-based counterparts.

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