Title

Government ownership and stock liquidity: Evidence from China

RIS ID

136908

Publication Details

Ding, M. & Suardi, S. (2019). Government ownership and stock liquidity: Evidence from China. Emerging Markets Review, 40 100625-1-100625-22.

Abstract

This paper documents that state ownership is associated with higher stock liquidity, a finding consistent with lower investor risk perception of firms that benefit from state ownership, like preferential financing and implicit government guarantees. The effect is found to be stronger when government ownership confers stronger benefits like firms with state controlling rather than non-controlling shareholders, and when the benefits of government ownership are important - for smaller firms, for financially constrained firms, and especially during the financial crisis period. These results suggest that investors perceive government ownership as value-enhancing, which increases their willingness to trade in such stocks.

Please refer to publisher version or contact your library.

Share

COinS
 

Link to publisher version (DOI)

http://dx.doi.org/10.1016/j.ememar.2019.100625