Managerial Decisions, Asset Liquidity, and Stock Liquidity

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dc.contributor.authorGopalan, Radhakrishnan
dc.contributor.authorKadan, Ohad
dc.contributor.authorPevzner, Mikhail
dc.date.accessioned2017-06-28T19:55:58Z
dc.date.available2017-06-28T19:55:58Z
dc.date.issued2009
dc.description.abstractWe predict a positive relationship between the liquidity of the firm's assets and the liquidity of its stock. This relationship depends on market expectations regarding the deployment of the firm's liquid assets. Thus our hypothesis links stock liquidity to managerial actions that change the liquidity of the firm's assets, such as investment, financing, and payout. Consistent with our prediction, we find that after controlling for firm fixed effects, a one standard deviation increase in asset liquidity increases stock liquidity by 14.5%. The relation is stronger when the manager is less likely to convert liquid assets into illiquid assets such as for low market to book and low capital expenditure firms, during economic recessions, and when expected payout is high. Apart from linking corporate finance decisions to stock liquidity, the analysis also promotes a new rationale for several empirical regularities such as the commonality in stock liquidity, and the improvement in stock liquidity following equity issuances.en_US
dc.description.urihttps://www.researchgate.net/profile/Radhakrishnan_Gopalan/publication/228289664_Managerial_Decisions_Asset_Liquidity_and_Stock_Liquidity/links/00b7d519cb677ae9b4000000/Managerial-Decisions-Asset-Liquidity-and-Stock-Liquidity.pdfen_US
dc.format.extent44 pagesen_US
dc.genrejournal articlesen_US
dc.identifierdoi:10.13016/M23R0PT25
dc.identifier.citationGopalan, Radhakrishnan and Kadan, Ohad and Pevzner, Mikhail, Managerial Decisions, Asset Liquidity, and Stock Liquidity (February 2009). EFA 2009 Bergen Meetings Paper.en_US
dc.identifier.uri10.2139/ssrn.1342706
dc.identifier.urihttp://hdl.handle.net/11603/4271
dc.language.isoen_USen_US
dc.publisherSSRNen_US
dc.relation.isAvailableAtUniversity of Baltimore
dc.titleManagerial Decisions, Asset Liquidity, and Stock Liquidityen_US
dc.typeTexten_US

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