Liquidity boosts stock returns in Vietnam during financial crisis, defying expectations.
The study looked at how the amount of money flowing in and out of the Vietnam stock market affects stock prices during a financial crisis from 2006 to 2010. By analyzing data on different companies listed on the Ho Chi Minh City Stock Exchange, the researchers found that when there is more liquidity (easy buying and selling), stock prices tend to go up. This goes against what was previously believed, which was that more liquidity meant lower stock prices.