HOW RESEARCH CONTRIBUTES TO HIGHER LIQUIDITY?
Market efficiency has been in the spotlight for more than 50 years, since Fama
introduced the Efficient Market Hypothesis. This is especially important from
the point of view of information asymmetry, as stock market investors have
information disadvantage compared to insiders which may result in higher
financing costs for companies and lower IPO prices.
However, a wide analyst base, the presence of local analysts and transparency
decreases funding costs for the companies, which also leads to higher interest
from investors in companies’ financial assets. Companies which have low
research coverage face excess funding costs compared to companies with wider