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HCBE Faculty Articles
Market Liquidity and Ambiguity: The Certification Role of Corporate Governance
ORCID
Emre Kuvvet0000-0001-5925-8004
Document Type
Article
Publication Title
Financial Review
ISSN
0732-8516
Publication Date
2014
Abstract/Excerpt
We investigate how firm‐specific certification practices through corporate governance can reduce perceived ambiguity and thus enhance liquidity of a firm in the stock market. We show that better corporate governance helps reduce ambiguity. In addition, a reduction in ambiguity is significantly related to higher liquidity of firms. Our results are robust to alternative model specifications and measures of ambiguity, and remain statistically significant after controlling for other known determinants of ambiguity and liquidity. Our results shed light on how ambiguity can be moderated through firm‐level certification practices and on the channel through which a moderation of ambiguity affects shareholder wealth.
DOI
https://doi.org/10.1111/fire.12051
Volume
49
Issue
4
First Page
643
Last Page
668
NSUWorks Citation
Kuvvet, Emre; Jiang, Christine X.; and Kim, Jang-Chul, "Market Liquidity and Ambiguity: The Certification Role of Corporate Governance" (2014). HCBE Faculty Articles. 764.
https://nsuworks.nova.edu/hcbe_facarticles/764