Contemporary review of stock market liquidity studies in emerging countries

Abstract

This study presents a review of stock market liquidity in emerging countries. Specifically, it highlights the factors that lead to the occurrence of a liquid market in emerging countries. Following a study by Ding, Ni, and Zhong (2016), this study argues that firms are motivated to have liquid stock to enable them to raise funds at a lower cost, so as to exploit growth opportunities. This paper contributes additional knowledge in terms of understanding stock market liquidity and offers some suggestions for future research. A systematic literature review (SLR) was adopted on stock market liquidity and its related causes and effects, encompassing the years 2010 to 2021. Based on the SLR, it is noted that the features and practices of firms, as well as the policies and regulations that are imposed by regulatory bodies and governments in emerging countries, are important. The limitation of this study is that only four micro-environmental factors and two macro-economic factors were reviewed. Therefore, it is suggested that in the future, researchers should focus on other factors, such as financial performance and political connection. The identification of factors in this study highlighted the gaps in current practices, thus, motivating future research to scrutinise issues relating to stock market liquidity more intensively

Corporate Social Responsibility Disclosure and Stock Market Liquidity: The Case of Jordan

“…This ambiguity arises due to a multitude of factors at play. For instance, Akrout and Ben Othman [34] and Abidin et al [44] suggest that firms involved in CSR activities can lead to reduced asymmetries in information, decreased transaction costs, and ultimately, an improvement in LIQUIDITY. Conversely, other researchers argue that some firms may strategically employ CSR to gain competitive advantages (e.g., [45]), while others might use it to cover up unethical practices, potentially resulting in heightened information asymmetries and a reduction in LIQUIDITY [46][47][48].…”