Corporate Governance and Stock Market Liquidity
Published: 2016
Author(s) Name: Manjit Kaur Sidhu |
Author(s) Affiliation: Research Scholar, University Business School, Panjab University, Chandigarh, India
Locked
Subscribed
Available for All
Abstract
Corporate governance has an impact on both quantity and quality of corporate information disclosure which affects the level of information asymmetry and thus impacts the changes in market liquidity of stock. This article attempts to discern the relationship between corporate governance and the stock market liquidity of Indian manufacturing companies included in the S&P BSE 100 Index during the period 2009-2012 by invoking pooled regression model. The empirical results support corporate governance implications of stock market liquidity as measured by Amivest measure (1985), that is, better governed companies has higher liquidity. The results of the present study are in support of arguments made by Chung, Elder, and Kim (2010), i.e., firms may improve stock market liquidity by adopting corporate governance practices that mitigate informational asymmetries.
Keywords: Corporate Governance, Stock Market Liquidity, S&P BSE 100 Index
View PDF