Investigate the Factors Affecting Share Liquidity: Evidence from Istanbul Stock Exchange (ISE)

Abstract

The paper aims to investigate the factors affecting share liquidity of industrial companies in Turkey. the annual ranking data of 199 industrial companies listed on Istanbul Stock Exchange (ISE) were used for this study which covers a period of 8 years from 2005-20012. A regression analysis model is applied to test the relationship between factors such as “Liquidity ratio (LQR), debt ratio (DR), earnings per share (EPS), market capitalization (MAKCAP), book to market ratio (BV/MV), return on assets (ROA), and return on equity (ROE)” and share liquidity ratio (LQR).The result shows that there is an insignificant relation with each of  debt ratio, earning per share, and return on equity, and shows positive relation with each of firm size, book to market ratio, and return on assets.

Keywords: Liquidity, Share Liquidity, Liquidity measures.