IDEAS home Printed from
   My bibliography  Save this article

Optimal trading range and firm value around the Asian financial crisis


  • Yunieta Anny Nainggolan


The cross-sectional share price variation in eight East Asian markets before, during and after the 1997 Asian financial crisis is examined. The paper also studies whether firms in these markets correct their share prices to the optimal trading range using stock splits. The results vary across countries, across firms and across periods. Although some anomalies in some markets are found, most results are consistent with Merton's (1987) investor recognition hypothesis in an incomplete information market. Small firms as less-recognised firms choose low prices to attract small shareholders, thus increasing their shareholder base and the firm's value. Ownership concentration and corporate governance are found to be very important in explaining cross-sectional stock price variation. Specifically, small firms in Hong Kong, Malaysia and Thailand made stock splits to maintain their preferred share prices.

Suggested Citation

  • Yunieta Anny Nainggolan, 2009. "Optimal trading range and firm value around the Asian financial crisis," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 1(3), pages 215-234.
  • Handle: RePEc:ids:afasfa:v:1:y:2009:i:3:p:215-234

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:afasfa:v:1:y:2009:i:3:p:215-234. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmel O'Grady). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.