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Investor Conferences, Firm Visibility, and Stock Liquidity
Author(s) -
Brockman Paul,
Subasi Musa,
Uzmanoglu Cihan
Publication year - 2017
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/fire.12136
Subject(s) - market liquidity , stock (firearms) , business , visibility , information asymmetry , monetary economics , liquidity crisis , financial system , finance , economics , mechanical engineering , physics , optics , engineering
Abstract We examine the influence of investor conferences on firms’ stock liquidity. We find that firms participating in conferences experience a 1.4% to 2.8% increase in stock liquidity compared to nonconference firms. Consistent with investor conferences improving firm visibility, the increase in liquidity is larger for firms with low pre‐conference visibility and varies predictably with conference characteristics that affect the ability of investors to revise their beliefs about the firm. However, for firms with a large investor base and high visibility, conference participation is associated with a decline in stock liquidity, consistent with investor conferences exacerbating the information asymmetry among investors.