Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245209 
Year of Publication: 
2019
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 7 [Issue:] 1 [Publisher:] Taylor & Francis [Place:] Abingdon [Year:] 2019 [Pages:] 1-20
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Relying on the assumption that equity market provides useful information for firm decision, this study examines the effect of stock liquidity on corporate capital structure decision. We also analyze whether this effect varies according to country-level institutional environments. Using a comprehensive international dataset of 19,939 firms across 41 countries over 2000-2010, the paper offers two key findings. First, firms with higher stock market liquidity tend to have lower leverage. Second, countries with strong institutional environments are more likely to have a weaker (negative) relationship between stock market liquidity and leverage. These results are robust to different liquidity measurement and subsamples.
Subjects: 
capital decision
liquidity
institutional environment
leverage
JEL: 
G14
G30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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