Stock liquidity and default risk

This paper examines the impact of stock liquidity on firm bankruptcy risk. Using the Securities and Exchange Commission decimalization regulation as a shock to stock liquidity, we establish that enhanced liquidity decreases default risk. Stocks with the highest default risk experience the largest im...

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Bibliographic Details
Published in:Journal of financial economics 2017-06, Vol.124 (3), p.486-502
Main Authors: Brogaard, Jonathan, Li, Dan, Xia, Ying
Format: Article
Language:English
Subjects:
Bankruptcy
Corporate governance
Default
Financial economics
Governance
Liquidity
Power
Risk
Stock exchanges
Stock prices
Stocks
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