Corporate liquidity and firm value: evidence from China’s listed firms
1 School of Economics, Jinan University, Guangzhou, Guangdong, China
2 College of Economics and Management, South China Normal University, Guangzhou, Guangdong, China
* Corresponding author: email@example.com
The value of liquidity is a promising area for research. This paper analyzes the correlation be-tween corporate liquidity and firm value by using evidence from China’s listed firms. This paper also investigates the relation among corporate liquidity, R&D and firm size. The authors find that firm’s sufficient liquidity can increase its market value. However, corporate liquidity has insignificant effect on firm’s R&D. What’s more, the authors further find that corporate liquidity also has diseconomies of scale. Excess corporate liquidity may ad-versely affect market value of large firms.
Key words: liquidity / firm value / R&D / firm size
© Owned by the authors, published by EDP Sciences, 2016
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