{"title":"Board Reforms, Stock Liquidity, and Stock Market Development","authors":"Buhui Qiu, T. To","doi":"10.1093/rcfs/cfac030","DOIUrl":null,"url":null,"abstract":"\n This paper studies the effect of board reforms on stock liquidity using data from 37 countries. We document that board reforms significantly increase stock liquidity: the effective spread on average decreases by 12.7% after a board reform. As information asymmetry is a key determinant of stock liquidity, we further find that board reforms decrease information asymmetry, and the treatment effect of board reforms on stock liquidity is stronger for firms with ex ante higher information asymmetry. Finally, board reforms facilitate healthy stock market development, with the effect being stronger for countries with lower aggregate stock market liquidity prior to reforms.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":" ","pages":""},"PeriodicalIF":1.9000,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Corporate Finance Studies","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1093/rcfs/cfac030","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 1
Abstract
This paper studies the effect of board reforms on stock liquidity using data from 37 countries. We document that board reforms significantly increase stock liquidity: the effective spread on average decreases by 12.7% after a board reform. As information asymmetry is a key determinant of stock liquidity, we further find that board reforms decrease information asymmetry, and the treatment effect of board reforms on stock liquidity is stronger for firms with ex ante higher information asymmetry. Finally, board reforms facilitate healthy stock market development, with the effect being stronger for countries with lower aggregate stock market liquidity prior to reforms.
期刊介绍：
The Review of Corporate Finance Studies (RCFS) is dedicated to publishing high-quality research in the expansive field of Corporate Finance. The journal seeks original contributions, reviewing papers based on their unique insights into Corporate Finance. This encompasses a wide spectrum, including a firm's interactions with stakeholders, capital markets, internal organization structure, compensation mechanisms, corporate governance, and capital management. RCFS also welcomes research in financial intermediation, financial institutions, microstructure, and the implications of asset pricing for Corporate Finance. The journal considers theoretical, empirical, and experimental papers for review.
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