Local Business Cycles and Local Liquidity

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

This study examines whether state-level economic conditions affect the liquidity of local firms. We find that liquidity levels of local stocks are higher (lower) when the local economy has performed well (poorly). This relation is stronger when local financing constraints are more binding, the local information environment is more opaque, and local institutional ownership levels and trading intensity are higher. Overall the evidence supports the notion that the geographical segmentation of U.S. capital markets generates predictable patterns in local liquidity.

Original languageEnglish (US)
Pages (from-to)987-1010
Number of pages24
JournalJournal of Financial and Quantitative Analysis
Volume50
Issue number5
DOIs
StatePublished - Dec 9 2015

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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