Stock Liquidity and the Pricing of Earnings: A Comparison of China’s Floating and Non-floating Shares

• Main Authors: FANG, Lou, WANG, Jiwei, YUAN, Hongqi
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Stock Liquidity; Pricing; Earnings; China; Accounting; Asian Studies; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/soa_research/1123; https://ink.library.smu.edu.sg/context/soa_research/article/2122/viewcontent/WangJiwei2013StockLiquidityPricingEarnings.pdf
• Institution: Singapore Management University

The reform to convert non-floating shares to floating in China provides a setting in which shares are subject to different liquidity constraint. We show that the severity of this constraint is inversely related to the extent to which earnings information is reflected in the share prices. Specificall...