A Study of The Effect of Stock Liquidity on Enterprise Risk-Taking Level

Jiabeizi Yu; Entian Li

doi:10.54097/jhjhnc43

Authors

Jiabeizi Yu
Entian Li

DOI:

https://doi.org/10.54097/jhjhnc43

Keywords:

Stock Liquidity, Enterprise Risk-Taking Level, Two-Way Fixed Effects Regression Model, Robustness Test, Heterogeneity Test.

Abstract

Stock liquidity, as one of the important market characteristics of enterprises, not only affects the financing of listed enterprises, but also affects the risk decision of enterprise management, which in turn affects enterprise risk-taking level. In order to deeply explore the impact of stock liquidity on enterprise risk-taking level, this paper selects all the data of Shanghai and Shenzhen A-share listed companies from 2000 to 2023 in the Cathay Pacific CSMAR database as samples, and eliminates data from financial sector firms, and from companies designated as ST or ST*. Additionally, it excludes any instances where key financial metrics are incomplete or absent.After that, we carry out the descriptive statistics and correlation analysis of the samples, and conduct a analysis of the impact of stock liquidity on enterprise risk-taking level. Meanwhile, descriptive statistics and correlation analysis are carried out on the samples, and a two-way fixed-effects model regression is conducted around the impact of stock liquidity on enterprise risk-taking level, and lagged one period method, replacing the explained variables method and instrumental variables method are chosen to conduct the robustness test. Finally, it is concluded that stock liquidity is significantly positively correlated with enterprise risk-taking level, but there is no difference between the level of significance of the state-owned enterprises and that of the non-state-owned enterprises.And the conclusions obtained are robust.

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