How Does Split Announcement Affect Stock Liquidity? Evidence from Bursa Malaysia

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ID: 119391
2020
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Abstract
This study examines the impact of stock splits on stock liquidity in Bursa Malaysia from 2004–2018. The study uses event study methodology and investigates liquidity changes, the role of liquidity, and the relationship between abnormal returns and liquidity as well. We found a significant liquidity improvement on the splits announcement, announcement of book closing date and split execution date (Ex-date), while it declined after the split Ex-date. The findings also indicate that firms with a low-level liquidity prior to split announcements experienced an increase in liquidity after Ex-date. Using panel data analysis, we find that the fixed effect model is more appropriate than the pooled OLS, and the abnormal announcement returns are driven by stock liquidity.
Reference Key
jafarian2020riskshow Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors S. Amir Tabibian,Zhaoyong Zhang,Mohsen Jafarian;S. Amir Tabibian;Zhaoyong Zhang;Mohsen Jafarian;
Journal risks
Year 2020
DOI
10.3390/risks8030085
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