Skip to main content

Stock Liquidity and SMEs’ Likelihood of Bankruptcy: Evidence from the US Market

El Kalak, Izidin, Azevedo, Alcino, Hudson, Robert, Karim, Mohamad (2017) Stock Liquidity and SMEs’ Likelihood of Bankruptcy: Evidence from the US Market. Research in International Business and Finance, 42 . pp. 1383-1393. ISSN 0275-5319. (doi:10.1016/j.ribaf.2017.07.077) (KAR id:62395)

Microsoft Word (MS word) Author's Accepted Manuscript
Language: English

Restricted to Repository staff only
Contact us about this Publication
[thumbnail of MS word]
PDF Author's Accepted Manuscript
Language: English
Download (1MB) Preview
[thumbnail of Liquidity and Bankruptcu_21072016.pdf]
This file may not be suitable for users of assistive technology.
Request an accessible format
Official URL


We study the association between the stock liquidity of SMEs in the US and their likelihood of bankruptcy, using a data set that comprises information on 5,075 firms over the time period from 1984 to 2013 using the hazard model of Campbell et al. (2008). We find that less liquid stocks are associated with higher probability of bankruptcy, although there is substantial heterogeneity across industries regarding the predictive power of the liquidity measure on the likelihood of bankruptcy. Furthermore, the exchange where the SMEs are listed also affects the likelihood of bankruptcy. Classification performance tests conclude that adding a liquidity measure variable to the Campbell (2008) model improves its predictive power.

Item Type: Article
DOI/Identification number: 10.1016/j.ribaf.2017.07.077
Uncontrolled keywords: Market Liquidity; Liquidity Measures; Bankruptcy; Hazard Model
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Izidin El Kalak
Date Deposited: 26 Jul 2017 14:18 UTC
Last Modified: 16 Feb 2021 13:47 UTC
Resource URI: (The current URI for this page, for reference purposes)
El Kalak, Izidin:
  • Depositors only (login required):


Downloads per month over past year