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Analysts and stock liquidity – Global evidence

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  • Tung Lam Dang
  • Nguyen Trang Phuong Doan
  • Thi Minh Hue Nguyen
  • Thanh Thao Tran
  • Xuan Vinh Vo

Abstract

This paper investigates the relation between analyst coverage and stock liquidity with a focus on the role of information produced by financial analysts. Using a comprehensive dataset across 41 countries for the period 2000–2010, we document two novel findings. First, analyst coverage is positively correlated with stock liquidity. Second, the positive effect of analyst following on stock liquidity is attributed to the weak institutional environment. These findings suggest that financial analysts provide more public information to market participants and thus improve stock liquidity. This effect is attenuated in a country with a stronger institutional environment.

Suggested Citation

  • Tung Lam Dang & Nguyen Trang Phuong Doan & Thi Minh Hue Nguyen & Thanh Thao Tran & Xuan Vinh Vo, 2019. "Analysts and stock liquidity – Global evidence," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1625480-162, January.
    • Handle: RePEc:taf:oaefxx:v:7:y:2019:i:1:p:1625480
    DOI: 10.1080/23322039.2019.1625480
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    Cited by:

    1. Manh-Tung Ho & Ngoc-Thang B. Le & Hung-Long D. Tran & Quoc-Hung Nguyen & Manh-Ha Pham & Minh-Hoang Ly & Manh-Toan Ho & Minh-Hoang Nguyen & Quan-Hoang Vuong, 2021. "A Systematic and Critical Review on the Research Landscape of Finance in Vietnam from 2008 to 2020," JRFM, MDPI, vol. 14(5), pages 1-24, May.
    2. Xiangyu Chen & Muhammad Safdar Sial & Dang Khoa Tran & Waseem Alhaddad & Jinsoo Hwang & Phung Anh Thu, 2020. "Are Socially Responsible Companies Really Ethical? The Moderating Role of State-Owned Enterprises: Evidence from China," Sustainability, MDPI, vol. 12(7), pages 1-19, April.

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