Stock market liquidity and information asymmetry around voluntary earnings disclosures

2008 ◽  
Vol 4 (1) ◽  
pp. 60-75 ◽  
Author(s):  
Faten Lakhal
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Market Liquidity ◽  
Stock Market Liquidity ◽  
Earnings Disclosures

scholarly journals The Moderating Role of Information Asymmetry in the Relationship between Stock Market Liquidity and Institutional Investors: A Case of Textile Sector in Pakistan Stock Exchange

2019 ◽  
Vol IV (I) ◽  
pp. 10-18
Author(s):  
Muhammad Arif
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Institutional Investors ◽  
Stock Exchange ◽  
Market Liquidity ◽  
Significance Level ◽  
Stock Market Liquidity ◽  
Role Of Information ◽  
Textile Sector

The study focused on the moderation role of information asymmetry (IA) that plays a vital role between Stock market liquidity (SML) and Institutional investors (I.I) in textile sector of Pakistan stock exchange (PSX). Among total population of 155 companies, a sample of 150 textile companies is chosen with the help of convenient sampling technique for a period of 10 years (2009-2018). The results of Pre-moderation panel data regression analysis show that there is insignificant effect of I.I on SML while size (SZ), leverage (LEV) and growth (GR) have significant effect on SML. Further, post-moderation effect of IA, which is the uniqueness of the study, indicates a stronger significant effect of SZ, LEV and GR on SML as compare to pre-moderation regression results, which evident that IA do has a significant role between explanatory variables and SML. The results of the study are supporting the signaling theory on the base of moderation of IA that increases the significance level between I.I and SML.

Institutional investors, information asymmetry and stock market liquidity in France

2015 ◽  
Vol 11 (1) ◽  
pp. 44-59 ◽  
Author(s):  
Aymen Ajina ◽  
Faten Lakhal ◽  
Danielle Sougné
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Institutional Investors ◽  
Pension Funds ◽  
Market Liquidity ◽  
Least Square ◽  
Institutional Setting ◽  
Stock Liquidity ◽  
Content Type ◽  
Stock Market Liquidity

Purpose – The purpose of this paper is to examine the effect of institutional investors’ ownership and type on information asymmetry and stock market liquidity in France. Design/methodology/approach – The sample includes 162 French-listed firms from 2007 to 2009. The methodology relies on linear regressions using the method of ordinary least square. Before examining the interaction between liquidity and institutional investors, the authors check for the existence of the endogeneity problem by applying the Durbin-Wu-Hausman test of Davidson and MacKinnon (1993). The results of the endogeneity test show that institutional investors’ ownership and stock liquidity are endogenous. A simultaneous equation model using the double least square method is then tested to address this problem. Findings – The findings show that the proportion of institutional investors has a positive and significant effect on stock-market liquidity, which confirms the signal theory and trading hypothesis. These investors perform high trading activity which favorably affects market liquidity. The results also show that pension funds improve stock liquidity. This result suggests that pension funds manage huge assets decreasing transaction costs and improving liquidity. They display a positive signal to the market about more transparency and a low level of informational asymmetry. Practical implications – These results highlight the institutional investors’ role in defining the level of liquidity on the French market. The findings also stress the relevance of developing institutional investors’ demand for the Paris market in order to better assess firm value, protect minority ownership and improve market liquidity. Originality/value – In the French institutional setting, institutional investors act as a control device since minority shareholder interests are less protected than in Anglo-American counterparts. This result highlights the significant role of institutional investors in corporate governance structures and on financial markets. Their presence is a guarantee for minority interest protection and for more liquid stocks.

scholarly journals Corporate Disclosures, Information Asymmetry And Stock-Market Liquidity In France

2015 ◽  
Vol 31 (4) ◽  
pp. 1223 ◽  
Author(s):  
Aymen Ajina ◽  
Danielle Sougne ◽  
Faten Lakhal
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Market Liquidity ◽  
Annual Reports ◽  
Listed Firms ◽  
Bid Ask Spread ◽  
Trading Decisions ◽  
Stock Market Liquidity ◽  
Corporate Disclosures

This paper aims at studying the effect of corporate disclosures on information asymmetry and stock-market liquidity in France. Specifically, the purpose of this paper is to highlight the importance of information included in the annual reports on investors behavior. This is proxied by the information asymmetry component of the bid-ask spread and stock market liquidity. Our sample includes 196 French listed firms over a period ranging from 2004 to 2007. The results show that the extent of corporate disclosures in annual reports positively influences the liquidity of the French market and negatively affects the adverse selection component of the bid-ask spread. This effect is further confirmed by the commitment to IFRS by French-listed firms since 2005. Results on sub-scores show that non-financial and financial information are important in trading decisions while strategic information may be attractive only for long-term positions.

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