Impact of board attributes on stock liquidity: evidence from Pakistani panel data

Khan, Javed; Rehman, Shafiq Ur; Khan, Inayat

doi:10.1108/jaee-06-2021-0207

Cited by 7 publications

(8 citation statements)

References 65 publications

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“…Empirically, they showed that more frequent board meetings are related to higher stock liquidity. Khan et al (2022) also found that board meeting frequency is positively and significantly associated with stock market liquidity. Based on the arguments above, the following hypothesis is developed: H3: Frequent board meetings improves stock liquidity.…”

Section: Board Meetings and Stock Market Liquiditymentioning

confidence: 84%

“…They emphasized that this positive relationship becomes stronger if firms have poor governance. Khan, Rehman, and Khan (2022) investigated the effect of board composition on the stock market liquidity of non-financial Pakistani firms from 2007 to 2016. They found that directors' attendance, frequency of board meetings, the number of board sub-committees and board gender diversity positively influenced stock market liquidity.…”

Section: Review Of Board Structure and Stock Market Liquidity Studiesmentioning

confidence: 99%

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Board Structure and Stock Market Liquidity: Evidence from Saudi's Banking Industry

Almulhim¹

2022

5002

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This paper aims to explore the impact of corporate governance on banks’ stock market liquidity. Specifically, we examine the influence of one of the most important corporate governance mechanisms, board structure, on the stock market liquidity of listed banks in Saudi Arabia. We mainly concentrate on four characteristics of board structure: board size, board independence, board meetings and board busyness, and their impact on bid–ask spread, trading volume, turnover ratio and number of trades (employed as proxies of stock liquidity). This study employs a pooled ordinary least squares (OLS) model to investigate this relationship. Furthermore, we use a lag approach and the generalized method of moments (GMM) estimation to test for endogeneity issues. The findings of the two models are the same as the main estimation model of the OLS. Using a sample of 108 observations representing all banks listed on the Saudi Stock Market (TASI) from 2010 to 2020, we find a positive and significant association between board size and board independence with stock liquidity. However, board busyness is negatively associated with stock liquidity. Furthermore, we examine the relationship between board structure and agency problems. The results show that board size and board independence reduce agency problems, whereas board busyness increases agency problems. The findings of this paper provide implications for Saudi regulators, banks’ board of directors and banks’ shareholders.

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Section: Board Meetings and Stock Market Liquiditymentioning

confidence: 84%

Section: Review Of Board Structure and Stock Market Liquidity Studiesmentioning

confidence: 99%

Board Structure and Stock Market Liquidity: Evidence from Saudi's Banking Industry

Almulhim¹

2022

5002

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“…of these attempts demonstrated a positive effect of GD on SL; furthermore, they proved that the positive impact of GD on SL became stronger with the higher presence of females (e.g., Ahmed and Ali, 2017;Loukil et al, 2019;Nguyen and Muniand, 2021;Ye et al, 2021;Abidi and Nsaibi, 2022;Khan et al, 2022). The positive effect of GD on SL may be a result of investors' confidence in women to add value and improve the interests of shareholders (Sudeck and Latridis, 2014).…”

Section: The Moderating Impact Of Gender Diversity On Income Smoothin...mentioning

confidence: 98%

“…The dependent variable in the current study is SL. Most prior studies employed the Amihud illiquidity measure (2002) to estimate SL (e.g., Bazrafshan et al, 2021;Khan et al, 2022;Abidi and Nsaibi, 2022;Michael et al, 2022) because it is strongly associated with the high-frequency price impact benchmark, allows a better understanding of liquidity premium, and the simplicity of its construction (Lou and Shu, 2017). This measure can be illustrated by the ratio of the absolute stock return to the trading volume of the stock as follows (Amihud, 2002): Where ILLIQiy refers to the value of stock illiquidity for a firm (i), on a day (d), and a year (y).…”

Section: Variables Descriptionmentioning

confidence: 99%

“…SL plays a vital role in the stock market's efficiency as an increase in SL can cause a decline in transaction costs, an increase in stock returns, and a crucial role in the pricing process (Sayari and Omri, 2017;Sayari, 2018). Additionally, SL enables firms to attract more investments, raise their funds by issuing new stocks, and diminish their capital costs (Al-Jaifi, 2017; Khan et al, 2022). Prior studies proved the implications of SL in many aspects such as firms' dividends (e.g., Michaely and Qian, 2022;Stereńczak and Kubiak, 2022), cash holdings (e.g., Nyborg and Wang, 2021;Im et al, 2022), firm's value (e.g., Jawed and Kotha, 2022;Shamsic et al, 2022), capital structure (e.g., Dang et al, 2019;Dutta et al, 2022), corporate diversification (e.g., Gu et al, 2018), cost of capital (e.g., Amihud et al, 2015;Rahman and Rajib, 2018), and firms' performance (e.g., Boloupremo, 2020;Chabachib et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

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How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

Elsayed

Srour

Elsayed

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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Purpose -The study seeks to examine the impact of income smoothing (IS) on stock liquidity (SL). Further, it investigates the moderating impact of gender diversity (GD) which is represented by board gender diversity (BGD), and audit committee gender diversity (ACGD) in this relationship.Design/methodology/approach -The study relies on a quantitative research method to assess the impact of IS on SL and then the moderating impact of GD in (62) Egyptian firms from 2018 to 2021. Panel Data regression analysis and the Kruskal-Wallis's test are run to test the hypotheses. Findings -The results conclude a significant negative impact of IS on SL. Moreover, this relationship is enhanced by GD where BGD and BGD×ACGD weakens the negative impact of IS on SL. Also, the study demonstrates significant differences among Egyptian Stock Exchange (ESE) sectors regarding IS, besides, there are insignificant differences regarding SL.Originality/value -This study expands the extant literature by providing novel empirical evidence about the moderating impact of GD on the IS-SL relationship. The study is in line with the growing universal interest in increasing females' participation in boardrooms. Also, the focus of this study is Egypt which has cultural practices and traditional customs toward women. Moreover, the study supports the decisions of regulatory bodies in Egypt to raise the participation of women.

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Impact of accrual and real earnings management on the stock liquidity: the month-of-the-year and Ramadan effects

Salehi,

Soleimanizadeh

2023

JIABR

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Purpose The abnormality of the month-of-the-year and Ramadan effects has extensively existed in the stock and other markets. The commercial strategy pattern and the computation of such predictable patterns in the market allow investors to make money. By using anomalies such as the month-of-the-year and the Ramadan effects on earnings management (EM), it is possible to achieve such a goal. This study aims to investigate the month-of-the-year effect and the Ramadan effect on the relationship between accrual earnings management and real earnings management (AEM and REM, respectively) and liquidity in the Iranian capital market. Design/methodology/approach This empirical analysis comprises a panel data set of 80 listed firms (400 observations) on the Tehran Stock Exchange from 2016 to 2020. Findings The findings exhibit that when AEM and REM increase, information asymmetry also increases. The simultaneous increase of these variables leads to a decrease in stock liquidity. Furthermore, the results indicate that the month-of-the-year and Ramadan effects intensify the negative relationship between AEM and REM with stock liquidity. Therefore, EM is affected by the investor’s behavior in specific months. Practical implications Anomalies caused by the Ramadan effect and the month-of-the-year effect on reducing liquidity in the Iranian stock market were confirmed. Investors can use these anomalies to identify predictable patterns, exchange securities according to those patterns and earn abnormal returns. Originality/value To the best of the authors’ knowledge, this is the first study that empirically examined the simultaneous effect of Gregorian and Islamic calendar anomalies on the relationship between EM and liquidity, and while helping managers and other readers, it can be the basis for future research.

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Impact of board attributes on stock liquidity: evidence from Pakistani panel data

Cited by 7 publications

References 65 publications

Board Structure and Stock Market Liquidity: Evidence from Saudi's Banking Industry

Board Structure and Stock Market Liquidity: Evidence from Saudi's Banking Industry

How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

Impact of accrual and real earnings management on the stock liquidity: the month-of-the-year and Ramadan effects

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