The relationship between liquidity, corporate governance, and firm valuation: Evidence from Russia

► We examine the hypotheses that liquidity improves corporate governance, and better governance enhances valuation of Russian firms. ► Positive causal relationship between measures of liquidity and corporate governance. ► Strong positive impact of corporate governance on valuation. ► 10% decrease in liquidity measure implies a 0.34% increase in corporate governance, which in turn leads to a 9.6% increase in firm valuation.