Economics, Econometrics and Finance
8 years ago

Stock splits in France attract individual investors, impacting market liquidity and returns.

SSRN Electronic Journal
Stock Splits on Paris Bourse: A Way to 'Divide and Conquer' - Managers’ Incentives and Investors’ Preferences
Bruno Pecchioli

Paper Summary

Stock splits in France aim to make stocks more accessible to individual investors and boost trading activity. Managers lower stock prices to attract small investors, which can benefit institutional investors but reduce required returns for the market. This can limit managers' efforts and risk-taking. French market reactions to stock splits show a pattern between 2003 and 2007.

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