Business, Management and Accounting
4 years ago

Stock splits lead to widespread decline in liquidity, especially for large stocks.

Research paper series
Market Structure and Stock Splits
David Michayluk, Paul Kofman

Paper Summary

Stock splits can lead to decreased liquidity in trading activity, especially for large stocks on Nasdaq. Even after rule changes in 1997, liquidity still declines following stock splits, but not as severely on Nasdaq.

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