Corporate governance and stock liquidity dimensions: Panel evidence from pure order-driven Australian market
Embargoed until: 2020-07-01
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Our newly constructed index of corporate governance quality (CGQ) provides comprehensive and robust evidence for the association between CGQ and stock liquidity in the pure order-driven Australia market. By using a large sample of 1207 firms from 2001 to 2013, we find a significant positive relationship between CGQ and stock liquidity, suggesting that better governed firms have greatly improved stock liquidity. Specifically, we find that better governed firms have a lower trading cost, smaller price impacts of trade, and higher trading speed. Moreover, the empirical results reveal that CGQ improves stock liquidity because it is associated with higher information disclosure.
International Review of Economics and Finance
Copyright 2017 Elsevier. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
This publication has been entered into Griffith Research Online as an Advanced Online Version.
Applied Economics not elsewhere classified