• Corpus ID: 210713832

Corporate Governance, Noise Trading and Liquidity of Stocks

  title={Corporate Governance, Noise Trading and Liquidity of Stocks},
  author={Jian Su},
  journal={arXiv: Trading and Market Microstructure},
  • Jian Su
  • Published 17 January 2020
  • Economics, Business
  • arXiv: Trading and Market Microstructure
Our main task is to study the effect of corporate governance on the market liquidity of listed companies' stocks. We establish a theoretical model that contains the heterogeneity of investors' beliefs to explain the mechanisms by which corporate governance improves liquidity of the corporate stocks. In this process we found that the existence of noise traders who are semi-informed in the market is an important condition for corporate governance to have the effect of improving liquidity of the… 

Figures from this paper



Corporate Governance and Liquidity

We investigate the empirical relation between corporate governance and stock market liquidity. We find that firms with better corporate governance have narrower spreads, higher market quality index,

The Effect of Corporate Governance on Stock Liquidity: The Case of Thailand

Grounded in agency theory, this study explores the effect of corporate governance on equity liquidity in Thailand. Theory suggests that effective governance enhances financial and operational

Corporate Governance and Equity Prices

Shareholder rights vary across firms. Using the incidence of 24 unique governance rules, we construct a "Governance Index" to proxy for the level of shareholder rights at about 1500 large firms

Investor Protection and Corporate Valuation

We present a model of the effects of legal protection of minority shareholders and of cash-f low ownership by a controlling shareholder on the valuation of firms. We then test this model using a

Agency Conflicts, Investment, and Asset Pricing

The separation of ownership and control allows controlling shareholders to pursue private benefits. We develop an analytically tractable dynamic stochastic general equilibrium model to study asset

Asset Pricing with Liquidity Risk

This Paper studies equilibrium asset pricing with liquidity risk (the risk arising from unpredictable changes in liquidity over time). It is shown that the required return on a security depends on

A Survey of Corporate Governance

This article surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around

A liquidity-augmented capital asset pricing model