The liquidity of shares and the risk of bankruptcy

Agata Gniadkowska-Szymańska ()
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Agata Gniadkowska-Szymańska: University of Lodz, Faculty of Economics and Sociology, Department of Capital Market and Investments

Bank i Kredyt, 2022, vol. 53, issue 6, 565-586

Abstract: The aim of the article is to present the problem of the relationship between the liquidity of shares and the risk of bankruptcy. Integrating the respective approaches should reveal whether the liquidity of shares will affect the bankruptcy of a company. The study analyses companies from the Warsaw Stock Exchange included in the WIG index, from the Frankfurt Stock Exchange included in the DAX index and from the Baltic countries’ market included in the OMXBBGI index listed on the Nasdaq stock exchanges in Tallinn, Riga and Vilnius. It involved several separate evaluations conducted with the use of various measures describing liquidity based on the data obtained for the Polish, German and the Baltic countries’ markets, and it confirms the hypothesis put forward at the beginning of the study that there is a statistically significant relationship between the liquidity of shares and the bankruptcy risk of the company.

Keywords: financial liquidity; bankruptcy; the economic condition of companies; capital market; liquidity of shares (search for similar items in EconPapers)
JEL-codes: G12 G13 G32 G33 M2 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpbik:v:53:y:2022:i:6:p:565-586

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