Liquidity: Urban versus rural firms

Liquidity: Urban versus rural firms

Our paper examines the impact of geographic location on liquidity for U.S. rural- and urban-based companies. Even after adjusting for size and other factors, rural firms trade much less, are covered by fewer analysts, and are owned by fewer institutions than urban firms. Trading costs are higher for...

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Veröffentlicht in:Journal of financial economics 2005-11, Vol.78 (2), p.341-374
Hauptverfasser: Loughran, Tim, Schultz, Paul
Format: Artikel
Sprache:eng
Schlagworte:
Financial economics
Financial performance
Geographic location
Liquidity
Location of enterprises
Regional economics
Rural areas
Stock prices
Stock returns
Trading costs
U.S.A
Urban areas
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Zusammenfassung:Our paper examines the impact of geographic location on liquidity for U.S. rural- and urban-based companies. Even after adjusting for size and other factors, rural firms trade much less, are covered by fewer analysts, and are owned by fewer institutions than urban firms. Trading costs are higher for rural Nasdaq firms, and volume that can be attributed to marketwide factors is lower for rural stocks. The findings add to our understanding of the way that access to information and familiarity affect liquidity.
ISSN:0304-405X
1879-2774
DOI:10.1016/j.jfineco.2004.10.008