Surveying of the Relationship between Corporate Governance Mechanisms and Stock liquidity in Tehran Stock Exchange

Abstract

The current study has presented evidences about the relation of some corporate governance mechanisms including percent ownership of institutional shareholders, ownership concentration, percent free floating shares, board of directors’ independency and the kind of auditor with stock liquidity. It has been used four criterions including Amihud non liquidity ratio, Amivest liquidity ratio, liquidity rank and the difference between purchase and sale offering price of shares. The current study is methodologically a correlative post- event research and from aspect of purpose due to results application in capital market is practical. the under studying statistic universe in this research is accepted corporations in Tehran stock exchange and a sample including124 corporations has been studied during 5 years (1385- 1389). Correlation, multi regression and average comparison tests have been used for testing hypotheses in this research. The results of testing hypotheses indicate that there is a direct relationship between percent ownership of institutional shareholders and percent of free floating shares with stock liquidity but there isn’t any relationship between board of directors’ independency and auditor kind and ownership concentration with stock liquidity.

Keywords: Corporate Governance, Percent ownership of Institutional Shareholders, Ownership Concentration, Percent of free floating shares, Stock liquidity.