Corporate Governance and Liquidity

  title={Corporate Governance and Liquidity},
  author={K. Chung and J. Elder and Jang-Chul Kim},
  • K. Chung, J. Elder, Jang-Chul Kim
  • Published 2008
  • Business
  • 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, smaller price impact of trades, and lower probability of information-based trading. In addition, we show that changes in our liquidity measures are significantly related to changes in the governance index over time. These results suggest that firms may alleviate information-based trading and improve… CONTINUE READING
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