Impact of stock splits on trading liquidity – evidence from the New York Stock Exchange
Impact of stock splits on trading liquidity – evidence from the New York Stock Exchange

Summary/Abstract: The article deals with trading liquidity proxied by a change in trading volume following a stock split. The author examines an impact of stock splits performed by companies listed on the New York Stock Exchange in the time period of 2009−June 2011 on subsequent liquidity using event study. He investigates the consequences of the split for the volume immediately after splitting the stocks as well as in 81-day event window. The trading liquidity in the aftermath of the split worsens which contradicts theories that postulate that stock splits to attract more attention of capital market’s participants, in particular through a greater number of trades and/or greater liquidity.

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