| Speaker: | An Yan |
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| Speaker Intro: | |
| Host: | |
| Description： | In the paper, we study the relation between stock liquidity and firm value in relation to the mergers and acquisitions. We find that a firm’s value on average is positively related to its stock liquidity. However, the positive relation becomes less pronounced when the firm has a higher likelihood of being a bidder. A firm’s value could even be negatively related to stock liquidity when the firm has a sufficiently high likelihood of being a bidder. We also find that once a liquid firm does become a bidder, investors react negatively upon the takeover announcement. These results suggest that there could exist a dark side of stock liquidity on firm value in relation to the firm’s takeover activities. Finally, we study the monitoring explanation and the overinvestment-based agency cost explanation on this dark side of stock liquidity. |
| Time: | 16:30-18:00, Monday, May 19, 2014 |
| Venue: | Room N303 Economic Building |
| Organizer: | WISE |