Internal control and stock liquidity

Yahui Sun, Yating Huang and Qindi Feng

Finance Research Letters, 2024, vol. 66, issue C

Abstract: This paper examines the correlation between corporate internal control and stock liquidity by utilizing data from China's A-share listed companies spanning the period from 2012 to 2022. It is observed that a higher quality of internal control positively signals to the capital market, thereby enhancing the stock liquidity of the enterprise. Furthermore, compared to state-owned enterprises, earnings quality serves as a partial intermediary in the process where internal control influences stock liquidity. However, for non-state-owned enterprises, the improvement in the quality of internal control is more notably effective in augmenting stock liquidity.

Keywords: Internal control; Earnings quality; Stock liquidity (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007463

DOI: 10.1016/j.frl.2024.105716

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