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The Effect of the Transparency Level of the ISE-Listed Banks on Liquidity

A. R. Zafer Sayar, Onder Kaymaz and Ali Alp

Istanbul Stock Exchange Review, 2010, vol. 12, issue 45, 27-58

Abstract: As the financial markets globalize, the need for banks to collect funds from capital markets has increased; as an immediate consequence, the IPOs of Turkish banks have gained importance in terms of transparency and investor protection. Employing the data obtained from Istanbul Stock Exchange, we empirically investigate the effect of transparency level on the liquidity in the banking industry. We find that there is a significant and robust relationship between ‘transparency level’ and ‘liquidity’. The same direction also applies to the link between bank (assets) size and secondary offerings at a lower level of significance. We could not find though an evidence reporting any relationship of banks’ stock liquidity with ADR issues and BRSA-induced APR. Yet, the explanatory power of the model where the effect of APR on liquidity is controlled is documented to tend to increase.

Keywords: Transparency Level; Banking Industry; Liquidity; International Financial Reporting Standards (IFRSs); Istanbul Stock Exchange (ISE). (search for similar items in EconPapers)
JEL-codes: G21 G30 M41 M48 (search for similar items in EconPapers)
Date: 2010
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