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The liquidity of shares and the risk of bankruptcy

Author

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  • Agata Gniadkowska-Szymańska

    (University of Lodz, Faculty of Economics and Sociology, Department of Capital Market and Investments)

Abstract

The aim of the article is to present the problem of the relationship between the liquidity of shares and the risk of bankruptcy. Integrating the respective approaches should reveal whether the liquidity of shares will affect the bankruptcy of a company. The study analyses companies from the Warsaw Stock Exchange included in the WIG index, from the Frankfurt Stock Exchange included in the DAX index and from the Baltic countries’ market included in the OMXBBGI index listed on the Nasdaq stock exchanges in Tallinn, Riga and Vilnius. It involved several separate evaluations conducted with the use of various measures describing liquidity based on the data obtained for the Polish, German and the Baltic countries’ markets, and it confirms the hypothesis put forward at the beginning of the study that there is a statistically significant relationship between the liquidity of shares and the bankruptcy risk of the company.

Suggested Citation

  • Agata Gniadkowska-Szymańska, 2022. "The liquidity of shares and the risk of bankruptcy," Bank i Kredyt, Narodowy Bank Polski, vol. 53(6), pages 565-586.
    • Handle: RePEc:nbp:nbpbik:v:53:y:2022:i:6:p:565-586
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    References listed on IDEAS

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    More about this item

    Keywords

    financial liquidity; bankruptcy; the economic condition of companies; capital market; liquidity of shares;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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