The relation between intrafirm distances and information opacity: Evidence from stock market liquidity
Bid-ask spreads, Cultural distance, Geography, Liquidity, Transparency
Journal of Real Estate Research
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 of Finance
Original Publication Date
DOI of published version
UNI ScholarWorks, Rod Library, University of Northern Iowa
Cashman, George D.; Harrison, David M.; Seiler, Michael J.; and Sheng, Hainan, "The relation between intrafirm distances and information opacity: Evidence from stock market liquidity" (2019). Faculty Publications. 561.