| 讲座简介： | 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.
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