Does brand capital improve stock liquidity? Evidence from China

This study investigates how brand capital affects stock market liquidity. We posit that brand capital improves the corporate information environment, enhances competitiveness, and increases firm visibility ultimately resulting in higher stock liquidity. Using a sample of Chinese listed firms, we fin...

Full description

Saved in:
Bibliographic Details
Published in:International journal of finance and economics 2025-01, Vol.30 (1), p.382-404
Main Authors: Majeed, Muhammad Ansar, Ullah, Irfan, Tariq, Samia, Ahsan, Tanveer
Format: Article
Language:English
Subjects:
adverse selection
brand capital
Business administration
China
Humanities and Social Sciences
information asymmetry
NSOEs
stock liquidity
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study investigates how brand capital affects stock market liquidity. We posit that brand capital improves the corporate information environment, enhances competitiveness, and increases firm visibility ultimately resulting in higher stock liquidity. Using a sample of Chinese listed firms, we find a positive relationship between brand capital and stock liquidity. Further analyses show that the effect of brand capital is more pronounced for firms with low media coverage and analyst following. Moreover, the effect of brand capital on stock liquidity is significant for non‐state‐owned enterprises. Our mechanism analyses also confirm that brand capital plays an informational role by effectively mitigating information asymmetry and adverse selection, leading to higher stock liquidity. Our study provides the first evidence of the nexus between brand capital and stock liquidity and extends the literature on the capital market implications of brand capital.
ISSN:1076-9307
1099-1158
DOI:10.1002/ijfe.2918