Firm visibility, liquidity, and valuation for thinly traded assets

Bing Han, Xinming Huang, Qi Liu and Yu-Jane Liu

Journal of Financial Markets, 2024, vol. 70, issue C

Abstract: We employ a regression discontinuity design to study how a market division experiment affects stock liquidity and firm valuation in an illiquid market. We document that an increase in firm visibility can substantially improve a firm's liquidity (measured by trading immediacy) and increase valuation by 28.4% for thinly traded assets. We also find some evidence that an improved information environment may contribute to enhanced liquidity and valuation.

Keywords: Thinly traded assets; Firm visibility; Market division; Liquidity; Valuation (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:70:y:2024:i:c:s1386418124000326

DOI: 10.1016/j.finmar.2024.100914

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