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Institutional Ownership and Stock Liquidity: International Evidence
Author(s) -
Dang Tung Lam,
Nguyen Thanh Huong,
Tran Nguyen Tram Anh,
Vo Thi Thuy Anh
Publication year - 2018
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12202
Subject(s) - market liquidity , institutional investor , business , stock (firearms) , monetary economics , panel data , positive relationship , financial system , economics , finance , corporate governance , econometrics , geography , archaeology , psychology , social psychology
This paper investigates the relation between institutional ownership and stock liquidity, and explores whether this relation differs across institutional settings. Using a comprehensive data set across 41 countries from 2000 to 2010, we find that institutional ownership is positively correlated with stock liquidity. Importantly, the positive association between institutional ownership and stock liquidity is stronger (weaker) for firms in countries with opaque (transparent) information environments or poor (good) institutional characteristics. Our additional analysis reveals that the positive association between institutional ownership and liquidity is attributable to non‐block institutional investors.