Article ID Journal Published Year Pages File Type
7362380 Journal of Financial Markets 2018 65 Pages PDF
Abstract
We document a negative association between foreign competition and stock liquidity. Our results are robust to addressing endogeneity concerns. We identify deterioration in the information environment in response to an increase in foreign competition as the channel behind the main result. Specifically, we find that the negative association is more evident among firms that are more susceptible to the negative consequences of foreign competition and firms that are poorly monitored and have lower analyst coverage. Our paper contributes to the understanding of the externalities of trade liberalization for financial market quality.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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