2016-03: Stock liquidity, corporate governance, and leverage: New panel evidence (Working paper)
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Author(s)
Sivathaasan, Nadarajah
Ali, Searat
Liu, Benjamin
Huang, Allen
Griffith University Author(s)
Year published
2016
Metadata
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In this study, we examine mainly the effect of stock liquidity and corporate governance on leverage policy in Australia. After controlling for the effects of firm-specific determinants, we find that stock liquidity and corporate governance quality (CGQ thereafter) reduce leverage significantly. Also, we document that high liquid firms in Australia dominate largely on determining the relation between CGQ and leverage, due to that CGQ is significantly strong in high liquid firms. Furthermore, our findings confirm prior research that firms with more liquid stocks are significantly less leveraged and CGQ has an inverse relation ...
View more >In this study, we examine mainly the effect of stock liquidity and corporate governance on leverage policy in Australia. After controlling for the effects of firm-specific determinants, we find that stock liquidity and corporate governance quality (CGQ thereafter) reduce leverage significantly. Also, we document that high liquid firms in Australia dominate largely on determining the relation between CGQ and leverage, due to that CGQ is significantly strong in high liquid firms. Furthermore, our findings confirm prior research that firms with more liquid stocks are significantly less leveraged and CGQ has an inverse relation with high leverage firms.
View less >
View more >In this study, we examine mainly the effect of stock liquidity and corporate governance on leverage policy in Australia. After controlling for the effects of firm-specific determinants, we find that stock liquidity and corporate governance quality (CGQ thereafter) reduce leverage significantly. Also, we document that high liquid firms in Australia dominate largely on determining the relation between CGQ and leverage, due to that CGQ is significantly strong in high liquid firms. Furthermore, our findings confirm prior research that firms with more liquid stocks are significantly less leveraged and CGQ has an inverse relation with high leverage firms.
View less >
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Copyright © 2010 by author(s). No part of this paper may be reproduced in any form, or stored in a retrieval system, without prior permission of the author(s).
Note
Finance
Subject
G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
G34 - Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
G12 - Asset Pricing; Trading volume; Bond Interest Rates
Stock liquidity
corporate governance
leverage
high and low liquidity firms