Economics, Econometrics and Finance
6 years ago

Stock splits in Chinese market boost liquidity, lowering trading costs significantly.

SSRN Electronic Journal
Stock Splits and Liquidity Risk in the Chinese Stock Market
May Hu, Ameeta Jain, Xinwei Zheng

Paper Summary

Stock splits in the Chinese stock market help improve liquidity by attracting more uninformed traders, which lowers trading costs. This was found through a study using a GAM model from 1996 to 2013.

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