The effect of stock liquidity on the risk of falling stock prices: Evidence from the Tehran Stock Exchange

Moanlogho, M.; Madrakian, H.

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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 5 Issue 12 pp. 1059-1066 , 2015

The effect of stock liquidity on the risk of falling stock prices: Evidence from the Tehran Stock Exchange Pages 1059-1066 Download PDF

Authors: Mehdi Moanlogho, Hasan Madrakian

DOI: 10.5267/j.msl.2015.10.009

Keywords: Liquidity, Stock price, Tehran Stock Exchange

Abstract: Liquidity of the stock exchanges plays essential role on investment decisions and it is one of the factors that may influence on stock price. The easier one can buy/sell shares of a firm, the higher liquidity the firm has. In fact, lack of liquidity may lead investors to sell their assets at cheaper prices and it could influence negatively on overall market. The primary objective of this paper is to study the effect of stock liquidity on the risk of falling stock prices. The study chooses historical information of 70 selected firms listed on Tehran Stock Exchange over the period 2006-2012. The results of this survey have indicated that there was a negative and meaningful relationship between stock liquidity and stock price decline.

How to cite this paper

 Moanlogho, M & Madrakian, H. (2015). The effect of stock liquidity on the risk of falling stock prices: Evidence from the Tehran Stock Exchange.Management Science Letters , 5(12), 1059-1066.

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