Investor protection and firm liquidity

• 成果类型: Article
• 署名作者: Brockman, P; Chung, DY
• 署名单位: Hong Kong Polytechnic University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00551
• 发表日期: 2003
• 页码: 921-937
• 关键词: market; finance; GROWTH; LAW

摘要

The purpose of this study is to investigate the relation between investor protection and firm 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 findings verify that firm liquidity is significantly affected 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.