IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v50y2014is3p140-157.html
   My bibliography  Save this article

Stock Liquidity and the Pricing of Earnings: A Comparison of China's Floating and Nonfloating Shares

Author

Listed:
  • Fang Lou
  • Jiwei Wang
  • Hongqi Yuan

Abstract

The reform aimed at converting nonfloating shares to floating shares in China provides a setting in which shares are subject to different levels of liquidity constraints. We show that the severity of these constraints is inversely related to the extent to which earnings information is reflected in share prices. Specifically, before the reform, transfer prices of nonfloating shares reflect much less earnings information than the market prices of floating shares. After the reform, however, transfer prices of nonfloating shares reflect more earnings information, although the weights are still less than those found in market prices. Thus, China's unique setting shows that share liquidity affects the way earnings are priced in stock.

Suggested Citation

  • Fang Lou & Jiwei Wang & Hongqi Yuan, 2014. "Stock Liquidity and the Pricing of Earnings: A Comparison of China's Floating and Nonfloating Shares," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(S3), pages 140-157.
    • Handle: RePEc:mes:emfitr:v:50:y:2014:i:s3:p:140-157
    DOI: 10.2753/REE1540-496X5003S308
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2753/REE1540-496X5003S308
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.2753/REE1540-496X5003S308?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sailendra SAILENDRA & Etty MURWANINGSARI & Sekar MAYANGSARI, 2019. "The Influence of Free Float Shares and Audit Quality on Company Performance: Evidence from Indonesia," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(154), pages 274-274.
    2. Gang-Zhi Fan & Zsuzsa R. Huszar & Weina Zhang, 2016. "The Helping Hand of the State in Chinese Real Estate Firms: Anti-corruption and Liberalization," International Real Estate Review, Global Social Science Institute, vol. 19(1), pages 51-97.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:50:y:2014:i:s3:p:140-157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.