We document the negative effect of stock liquidity on default risk for a sample of 46 countries. We further find that … shock that increases liquidity. The effect of liquidity on default risk is more pronounced in countries with poorer investor … impact of stock liquidity on default risk in international markets …

contractual links. The first is the market price channel, in which scarce funding liquidity and low market liquidity reinforce … case of illiquidity spirals, firms do not internalise the negative externality of holding low levels of funding liquidity … contagion - namely macroprudential liquidity regulation; restrictions on margins and haircuts; and information disclosure. …

their liabilities means that these funds are important sources of liquidity demand, often in already unsettled markets. The … concomitant reduction in liquidity supply by dealers raises the question of which intermediaries accommodate mutual funds' sales … demand liquidity, and insurance companies, which hold large amounts of corporate bonds. They often trade in opposite …

This paper examines the impact of stock liquidity on firm bankruptcy risk. Using the Securities and Exchange Commission … decimalization regulation as a shock to stock liquidity, we establish that enhanced liquidity decreases default risk. Stocks with the … highest default risk experience the largest improvements. We find two mechanisms through which stock liquidity reduces firm …

We study the association between the stock liquidity of SMEs in the US and their likelihood of bankruptcy, using a … substantial heterogeneity across industries regarding the predictive power of the liquidity measure on the likelihood of … performance tests conclude that adding a liquidity measure variable to the Campbell et al. (2008) model improves its predictive …