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Does increased disclosure of intangible assets enhance liquidity around new equity offerings?

Authors
  • Labidi, Manel
  • Gajewski, Jean François
Publication Date
Apr 01, 2019
Source
HAL
Keywords
Language
English
License
Unknown
External links

Abstract

The objective of this paper is to analyze how firms can enhance stock market liquidity around new equity offerings by increasing the level of disclosure on their intangible assets. Using a disclosure index consisting of 53 items, we show that French issuers disclose insufficient information about their intangible assets. We use measures of liquidity such as bid-ask spread, market depth, and trading volume to provide evidence that increased intangible asset information disclosure by new equity issuers improves secondary market liquidity immediately following the issue. These results provide new evidence that when raising funds, issuers can enhance stock liquidity by giving investors more information about intangible assets.

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