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Stock liquidity and corporate OFDI: Evidence from China’s capital market

Author

Listed:
  • Sun, Weizheng
  • Yang, Ling
  • Zhang, Xiaoyue
  • Ma, Ke

Abstract

This study aims to explore whether and how stock liquidity influences corporate outward foreign direct investment (OFDI). We suggest that firms possessing higher stock liquidity have more access to enhance their ownership advantages, which can facilitate OFDI engagement. The positive effect is more pronounced for firms in industries with high external financing dependence and firms with high quality of internal control. These findings enhance our understanding of the antecedents of OFDI from the perspective of the capital market microstructure and provide policy implications for enhancing capital markets to support EMNEs' global expansion strategies.

Suggested Citation

  • Sun, Weizheng & Yang, Ling & Zhang, Xiaoyue & Ma, Ke, 2025. "Stock liquidity and corporate OFDI: Evidence from China’s capital market," Finance Research Letters, Elsevier, vol. 86(PA).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pa:s1544612325016885
    DOI: 10.1016/j.frl.2025.108434
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    References listed on IDEAS

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