Stock liquidity and investment opportunities: new evidence from FTSE 100 index deletions
Article
Gregoriou, A. and Nguyen, N.D. 2010. Stock liquidity and investment opportunities: new evidence from FTSE 100 index deletions. Journal of International Financial Markets, Institutions and Money. 20 (3), pp. 267-274. https://doi.org/10.1016/j.intfin.2010.03.005
| Type | Article |
|---|---|
| Title | Stock liquidity and investment opportunities: new evidence from FTSE 100 index deletions |
| Authors | Gregoriou, A. and Nguyen, N.D. |
| Abstract | This paper examines the relationship between stock liquidity and investment opportunities in a sample of firms experiencing a negative exogenous liquidity shock, captured by deletion from the FTSE 100 stock index. We find no statistical association between stock liquidity and investment opportunities. These findings are in sharp contrast to the positive relation between liquidity and investment opportunities reported in US equity markets. This unique result in the London Stock Exchange suggests that deletion from a major stock index does not influence corporate investment decisions because there is no significant change in the cost of capital. |
| Keywords | Stock Liquidity; Investment Opportunities; Index Deletion; London Stock Exchange |
| Publisher | Elsevier |
| Journal | Journal of International Financial Markets, Institutions and Money |
| ISSN | 1042-4431 |
| Publication dates | |
| Online | 23 Mar 2010 |
| 01 Jul 2010 | |
| Publication process dates | |
| Deposited | 16 Mar 2010 |
| Accepted | 15 Mar 2010 |
| Output status | Published |
| Web address (URL) | http://www.sciencedirect.com/science/article/pii/S1042-4431(10)00008-9 |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.intfin.2010.03.005 |
| Scopus EID | S1042-4431(10)00008-9 |
| Web of Science identifier | WOS:000414283800004 |
| Language | English |
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