Share Liquidity and Corporate Efforts to Enhance it. A study on the Swedish Stock Exchange

Research output: ThesisDoctoral Thesis (monograph)

Abstract

All modern firms need access to capital markets at the lowest possible cost. Today's investors want to be able to increase or decrease their ownership rapidly, at low transaction costs and they demand return compensation for the trading costs they meet. This means that the price of the firm's security will reflect its share liquidity characteristics. Consequently liquidity-increasing financial investments can increase the value of the firm, which in turn will lead to a reduction in the firm's cost of capital.

The thesis consists of four studies that explore share liquidity for Swedish firms listed on the Stockholm Stock Exchange. The first study provides insight into the question of key determinants of cross-sectional variations in bid-ask spreads in a purely order-driven market. The second study examines the impact of stock splits on the liquidity of securities in an order-driven market and the relationship between after-split spread changes and different pre-split firm-specific variables. The third study investigates the impact of equity issues on the liquidity of securities in an order-driven market and the relationship between after-issue spread changes and different pre-issue firm-specific variables. The fourth study analyzes the impact of cross-listing on a major foreign stock exchange on the share liquidity in the home market and the relationship between after-listing spread changes and different pre-listing firm-specific variables.
Original languageEnglish
QualificationDoctor
Awarding Institution
  • Department of Business Administration
Supervisors/Advisors
  • Oxelheim, Lars, Supervisor
Award date2005 Oct 21
Publisher
Print ISBNs91-85113-07-7
Publication statusPublished - 2005

Bibliographical note

Defence details

Date: 2005-10-21
Time: 14:15
Place: Crafoordsalen, Holger Crafoords Ekonomicentrum I, Tycho Brahes väg 1, Lund

External reviewer(s)

Name: Liljeblom, Eva
Title: Professor
Affiliation: Svenska Handelshögskolan, Helsingfors

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Subject classification (UKÄ)

  • Business Administration

Keywords

  • Financial science
  • Cross-listing
  • Equity issue
  • Split
  • Market microstructure
  • Bid-ask spread
  • Share liquidity
  • Cost of capital
  • Finansiering

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