Faculty Publications

The Relation Between Intrafirm Distances And Information Opacity: Evidence From Stock Market Liquidity

Document Type

Article

Keywords

Bid-ask spreads, Cultural distance, Geography, Liquidity, Transparency

Journal/Book/Conference Title

Journal of Real Estate Research

Volume

41

Issue

4

First Page

639

Last Page

668

Abstract

We examine the relation between both intrafirm geographic and cultural distance (i.e., the distance between a firm’s headquarters location and its investment properties) on the underlying firm’s stock market liquidity. More specifically, using a sample of 166 publicly traded REITs and listed property companies across the Asia-Pacific region over the 2000–2013 period, we find strong evidence that firms with increased levels of intrafirm (geographic) distance exhibit wider bid-ask spreads, while firms with greater intrafirm cultural dispersion enjoy narrower spreads. We conclude that intrafirm distance is fundamentally related to a firm’s financial market (informational) opacity and offers both costs and benefits to market participants.

Department

Department of Finance

Original Publication Date

1-1-2019

DOI of published version

10.22300/0896-5803.41.4.639

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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