Stock Market Liquidity: A Literature Review

Naik, Priyanka; Reddy, Y.V.

doi:10.1177/2158244020985529

Cited by 26 publications

(13 citation statements)

References 108 publications

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“…is can be seen as a rejection of the semi-strong efficiency hypothesis of the US financial market during the COVID-19 pandemic. is confirms the results of Ferreira [59] who showed the inefficiency of the US market [60][61][62][63].…”

Section: Discussionsupporting

confidence: 90%

Illiquidity, Uncertainty Indices, and COVID‐19 Outbreak Conditions: Empirical Evidence from the US Financial Market

et al. 2022

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In this paper, wavelet coherences and quantile autoregressive distributed lag (QARDL) approaches are used to study the effect of economic policy uncertainty (EPU), infectious disease EMV tracker (IDEMV), and implied volatility (VIX) on illiquidity during the tranquil and COVID-19 epidemic periods in the US financial market. Our results show that lagged EPU, current VIX, and lagged VIX positively affect illiquidity during the calm period, while the lagged EPU and current VIX decrease illiquidity during the pandemic period. Furthermore, infectious diseases in the financial market during the pandemic crisis play a significant role in instantaneously improving liquidity, while it was not significant during the tranquil period. Similarly, we suggest that with the combined effect of the EPU and the VIX, the uncertainty caused by implied volatility decreases liquidity in a lagged and contemporaneous manner, while an improvement in liquidity is revealed in the case of the EPU.

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Section: Discussionsupporting

confidence: 90%

Illiquidity, Uncertainty Indices, and COVID‐19 Outbreak Conditions: Empirical Evidence from the US Financial Market

et al. 2022

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“…The importance of liquidity is underscored by its effects on the earnings for investors [80]. According to Naik and Reddy [82], the existence of market liquidity helps a trader to ascertain the level of his earnings and so assist in formulating suitable trading plans.…”

Section: Cryptocurrencies and Market Liquiditymentioning

confidence: 99%

Cryptocurrency and Global Practices: Lessons for Nigeria

Ogunode

Iwala

Awoniyi

et al. 2022

SAJSSE

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This paper examined cryptocurrency and its global practices with particular reference to salient lessons for the Nigerian economy. The desk review methodology anchored on content analysis was used for the study. The paper identified distrust in political systems, weak domestic currency and high inflation rates as key factors fueling the growth of cryptocurrency usage in Nigeria thus motivating individuals to resort to cryptocurrencies as a tool for wealth preservation and inflation hedge. The study also found that the existence of trust deficit and challenges associated with privacy concerns, system uptime and stringent onboarding requirements were capable of derailing the success of the newly launched digital currency(‘e-naira’) issued by government to curtail cryptocurrency usage in Nigeria. The study concluded that cryptocurrencies and central bank issued digital currencies (CBDCs) are now part and parcel of the new economic order and represents the future of finance. It therefore recommended that nation states should work assiduously to develop uniformly agreed regulatory framework and global standards for the usage of cryptocurrencies.

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“…First, several studies argue that these stock markets are mostly dominated by small investors and noise trading (Brzeszczyński et al, 2015; Chowdhury et al, 2019; Cuthbertson & Nitzsche, 2005; Iqbal, 2012). The investment decisions of small investors in the South-Asian markets are driven by either sentiments or past share price movements which leads to greater price volatility in these markets (Brzeszczyński et al, 2015; Chowdhury et al, 2019; Naik & Reddy, 2021; Shiller, 1990). In addition, the noise trading further contributes toward enhanced risk in the short term, thereby offering unique justifications for the time-varying return patterns of stock market anomalies.…”

Section: Introductionmentioning

confidence: 99%

Adaptive Market Hypothesis and Time-varying Contrarian Effect: Evidence From Emerging Stock Markets of South Asia

2022

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This study contributes to the growing debate on the relation between varying stock market conditions and the profitability of stock market anomalies. We investigate the effect of changed market conditions on time-varying contrarian profitability in order to examine the presence of the Adaptive Market Hypothesis (AMH) in South Asian emerging stock markets. The empirical findings reveal that a strong contrarian effect holds in all the emerging markets. We also find the stock return opportunities vary over time based on contrarian portfolios. We show that contrarian returns strengthen during the down state of market, higher volatility and crises periods, particularly during the Asian financial crisis. Interestingly, the market state instead of market volatility is the primary predictor of contrarian payoffs, which contradicts the findings of developed markets. We argue that the linkage arises from structural and psychological differences in emerging markets that produce unique intuitions regarding stock market anomalies returns. The overall findings on the time-varying contrarian returns in this study provide partial support to AMH. Another significant outcome of this study implies that investors in South Asian emerging markets, like investors in the developed markets, could not adapt to evolving market conditions. Therefore, contrarian profits often exist, and persistent weak-form market inefficiencies prevail in these markets.

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Stock Market Liquidity: A Literature Review

Cited by 26 publications

References 108 publications

Illiquidity, Uncertainty Indices, and COVID‐19 Outbreak Conditions: Empirical Evidence from the US Financial Market

Illiquidity, Uncertainty Indices, and COVID‐19 Outbreak Conditions: Empirical Evidence from the US Financial Market

Cryptocurrency and Global Practices: Lessons for Nigeria

Adaptive Market Hypothesis and Time-varying Contrarian Effect: Evidence From Emerging Stock Markets of South Asia

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