Stock liquidity and free float: evidence from the UK
ISSN: 0307-4358
Article publication date: 21 September 2018
Issue publication date: 25 September 2018
Abstract
Purpose
The purpose of this paper is to investigate the interactions between free float and stock liquidity in the UK stock market over the period 2002–2016.
Design/methodology/approach
This paper is conducted using cross-sectional data regression analysis. The sample consists of 15,650 firm-level observations from the UK stock market.
Findings
The findings suggest that stocks with higher levels of free float are associated with higher levels of liquidity. This relation is significant regardless of the liquidity measure used, and is evident even after controlling for firm characteristics.
Originality/value
This paper contributes to the existing literature by presenting further evidence on the significance of free float in capital markets and its effect on stock liquidity, particularly for UK firms as the minimum free float requirements as announced by the FTSE group in 2011 increased from 15 to 25 percent.
Keywords
Citation
El-Nader, G. (2018), "Stock liquidity and free float: evidence from the UK", Managerial Finance, Vol. 44 No. 10, pp. 1227-1236. https://doi.org/10.1108/MF-12-2017-0494
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited