Global Market Dynamics: The Impact of Home Country Macro-Institutional Quality on NYSE-Listed Non-U.S. Stocks

Teressa Elliott (), Jang-Chul Kim and Ha-Chin Yi ()
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Teressa Elliott: Haile College of Business, Northern Kentucky University, Highland Heights, KY, USA
Jang-Chul Kim: Haile College of Business, Northern Kentucky University, Highland Heights, KY, USA
Ha-Chin Yi: McCoy College of Business, Texas State University, San Marcos, TX, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2025, vol. 28, issue 02, 1-23

Abstract: We investigate liquidity and information asymmetry for a sample of non-U.S. stocks in the NYSE. Using the Worldwide Governance Indicators (WGI), we find that liquidity and information asymmetry measures for non-U.S. stock listings are significantly related to the macro-institutional quality of their home countries such as political risk and absence of violence/terrorism, government effectiveness, voice and accountability, control of corruption, and rule of law. We find non-U.S. stocks from countries with lower institutional quality metrics tend to have lower liquidity and higher information asymmetry. Therefore, improving the institutional quality of a country alleviates information problems and improves market liquidity for non-U.S. stocks listed on the NYSE.

Keywords: Liquidity; information asymmetry; American Depository Receipts (ADRs); spreads; country risk; institutional quality (search for similar items in EconPapers)
JEL-codes: G12 G15 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0219091525500134

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