 The Effect of Stock Splits on Liquidity: Evidence from ChinaBilal Ahmad Pandow and Khurshid Ali Ganai Business Perspectives and Research, 2026, vol. 14, issue 2, 170-185 Abstract: Despite many theories that explain the stock split announcement by companies, it has been viewed and aimed differently by corporate managers, regulators and investors. Many studies suggest stock splits are often used to lower the price and bring it to an acceptable trading range. However, few studies focus on emerging economies like China. The present study employs a market model to estimate aberrant volumes. Cumulative abnormal volumes and buy-and-hold abnormal volume estimations were used in accordance with a long-term event study. It was found that after firms have gone for stock splits, their liquidity has increased. Thereby suggesting that there is a significant influence on the post-split liquidity as was found in case of the firm that have gone for stock splits listed on China’s Shanghai Stock Exchange during the select period. Also, a statistically significant upward trend was also observed following the split by the firms. Study findings can be useful to regulators, managers, and investors per their interests. This paper has a limitation of using market model. Future research could also increase the time period and the number of firms that this paper has analyzed. Keywords: Stock liquidity; stock split; event study; corporate event; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:busper:v:14:y:2026:i:2:p:170-185 DOI: 10.1177/22785337221148823 Access Statistics for this article More articles in Business Perspectives and Research |
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