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Unlocking Liquidity: The Role of Market Makers in Kuwait’s Emerging Market

Author

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  • Khaled Alsabah
  • Saud Asaad Althaqeb

Abstract

This study uses a difference-in-differences approach to examine the influence of market-maker agreements on liquidity alterations in Boursa Kuwait. Our research indicates that signing a market-maker agreement augments the number of executed trades, turnover, and trading volume while decreasing instances of zero trades, bid–ask spread, and Amihud Illiquidity within the first week. Interestingly, these agreements do not affect stock return volatility.  Our study extends the knowledge about the role of market makers in emerging markets. JEL Codes: G10, G18, O53

Suggested Citation

  • Khaled Alsabah & Saud Asaad Althaqeb, 2025. "Unlocking Liquidity: The Role of Market Makers in Kuwait’s Emerging Market," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 24(2), pages 145-169, June.
    • Handle: RePEc:sae:emffin:v:24:y:2025:i:2:p:145-169
    DOI: 10.1177/09726527241297241
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    More about this item

    Keywords

    Kuwait; bid–ask spread; liquidity; market maker;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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