Stock liquidity and investment opportunities: new evidence from FTSE 100 index deletions.
Nguyen, Ngoc and Gregoriou, Andros (2010) Stock liquidity and investment opportunities: new evidence from FTSE 100 index deletions. Journal of International Financial Markets, Institutions & Money, 20 (3). pp. 267-274. ISSN 1042-4431
Full text is not in this repository.
This item is available in the Library Catalogue
This paper examines the relationship between stock liquidity and investment opportunities in a sample of firms experiencing a negative exogenous liquidity shock, captured by deletion from the FTSE 100 stock index. We find no statistical association between stock liquidity and investment opportunities. These findings are in sharp contrast to the positive relation between liquidity and investment opportunities reported in US equity markets. This unique result in the London Stock Exchange suggests that deletion from a major stock index does not influence corporate investment decisions because there is no significant change in the cost of capital.
|Keywords (uncontrolled):||Stock Liquidity, Investment Opportunities, Index Deletion, London Stock Exchange.|
|Research Areas:||Middlesex University Schools and Centres > Business School > Accounting and Finance|
|Deposited On:||16 Mar 2010 16:37|
|Last Modified:||15 Oct 2013 05:24|
Repository staff only: item control page
Full text downloads (NB count will be zero if no full text documents are attached to the record)
Downloads per month over the past year