Understanding the relationship between stock liquidity and firm's real investment - A study on Vietnam stock exchanges
Abstract
This thesis explores the relationship between firm’s real investment and firm’s stock
liquidity. By employing Generalised Method of Moments approach, using a panel of 158
firms listed on Hồ Chí Minh Stock Exchange and Hà Nội Stock Exchange for the period
from 2010–2017, the study finds that there exists a positive relationship, that is the higher
trading volume, the greater real investment (measured by growth in total assets, growth in
tangible fixed assets and growth in inventories) and vice versa.
Keywords: investment, liquidity, Tobin’s Q, financial constraints