Do Institutional Investors Improve Stock Liquidity? Evidence from the NYSE Euronext Paris Stock Exchange

Alexis Guyot 1, *
* Auteur correspondant
Abstract : This paper explores the impact of institutional investors on stock liquidity, according to their type, investment style, level of activism and portfolio rotation. We found that smaller firms benefit from institutional investment: spreads are narrowed and stock prices more resilient. Whereas, for larger firms, institutional investors can increase transaction costs. We also found that contrarian strategies add liquidity to the market, as do diversification strategies, whereas idiosyncratic strategies decrease stock liquidity; institutional investor activism sends a positive signal to the market for big companies but causes imbalances in stock prices for smaller ones. Finally, high portfolio rotation is negatively correlated with transaction costs for large firms but positively for small companies.
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Article dans une revue
Bankers Markets & Investors : an academic & professional review, Groupe Banque, 2013, pp.4-15
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http://hal-audencia.archives-ouvertes.fr/hal-00840917
Contributeur : Alexis Guyot <>
Soumis le : mercredi 3 juillet 2013 - 15:03:52
Dernière modification le : lundi 8 juillet 2013 - 11:03:06

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  • HAL Id : hal-00840917, version 1

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Alexis Guyot. Do Institutional Investors Improve Stock Liquidity? Evidence from the NYSE Euronext Paris Stock Exchange. Bankers Markets & Investors : an academic & professional review, Groupe Banque, 2013, pp.4-15. 〈hal-00840917〉

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