![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextgreen.png)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextred.png)
![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextgreen.png)
![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltext_open_medium.gif)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextred.png)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltext_restricted_medium.gif)
Testing the Relationship Between Liquidity and Stock Returns in the Palestinian Banks Listed in the Palestine Exchange
Subscribe/Renew Journal
This study examines the relationship between liquidity and stock returns in the Palestinian banks listed in the Palestine Exchange over the period July 2009–July 2018. The study uses three liquidity measures: trading probability (TP), turnover rate (TR), and the measure of Amihud (2002), ILLIQ. The results of Pearson’s correlation test showed a positive correlation between tow liquidity measures (TP and ILLIQ) and stock returns, and the results of fixed-effect model showed a significant effect for the same tow liquidity measures (TP and ILLIQ) on stock returns. So, in the context of Palestine, TP and ILLIQ seem to appear better measures for liquidity; thus, the investors can use these two measures of liquidity to predict the stock returns of the Palestinian banks.
Keywords
Liquidity, Returns, Trading Probability (TP), Turnover Rate (TR), ILLIQ.
Subscription
Login to verify subscription
User
Font Size
Information
- Aga, B. S., Mogaddam, V. F., & Samadiyan, B. (2013). Relationship between liquidity and stock returns in companies in Tehran stock exchange. Applied Mathematics in Engineering Management and Technology, 2(4), 278-285.
- Akbari, Z., Zarrin, J., & Yaghobi, M. (2017). The effect of liquidity risk on stock returns in listed companies in Tehran stock exchange. Scinzer Journal of Humanities, 3(2), 66-73
- Akram, N. (2014. The effect of liquidity on stock returns: An evidence from Pakistan. Journal of Business and Management, 16(2), 66-69.
- Amihud, Y. (2002). Illiquidity and stock returns: Crosssection and time-series effects. Journal of Financial Markets, 5, 31-56.
- Amihud, Y., & Mendelson, H. (1986). Asset pricing and the bid-ask spread. Journal of Financial Economics, 17, 223-249.
- Balesemi, N., Veiseh, S. M., & Malghrani, A. M. (2015). Relationship between liquidity and stock returns considering company’s life cycle: The case study of Tehran stock exchange listed companies. WALIA Journal, 31(s4), 85-91.
- Chiang, T. C., & Zheng, D. (2015). Liquidity and stock returns: Evidence from international markets. Global Finance Journal, 27, 73-97.
- Chikili, S., & Abaoub, N. (2013). Impact of liquidity on stocks returns: Application on the Tunis stock exchange. International Journal of Business and Behavioural Sciences, 3(3), 23-32
- Chikore, R., Gachira, W., Nkomo, D., & Chiwanza, W. (2014). Stock liquidity and returns: Evidence from the Zimbabwe stock exchange. Interdisplinary Journal of Contemporary Research in Business, 6(3), 20-35.
- Chordia, T., Subrahmanyam, A., & Anshuman, V. (2001). Trading activity and expected stock returns. Journal of Financial Economics, 59, 3-32.
- Gharaibeh, A. (2014). Capital structure liquidity and stock returns. European Scientific Journal, 10(25), 171-179.
- Haritian, K. R., & Sitorus, R. E. (2015). Liquidity and returns: Evidence from stock indexes around the world. Asian Economic and Financial Review, 5(1), 33-45.
- Heidarpoor, F., Rouhi, A., & Mashai, K. F. (2012). Relationship between stock liquidity and stock price changes rate. African Journal of Business Management, 6(37), 10178-10184
- Jun, S. G., Marathe, A., & Shawky, H. A. (2003). Liquidity and stock returns in emerging equity markets. Emerging Markets Review, 4, 1-24.
- Langeroodi, M. N., Meshki, M., Nejad, M. J., & Sarai, S. (2014). A study of relationship between measure of Amihud illiquidity and stock returns in Tehran stock exchange. Singaporean Journal of Business Economics and Management Studies. 3(3), 106-112.
- Marshall, B. R., & Young, M. 2003. Liquidity and stock returns in pure order-driven markets: Evidence from the Australian stock market. International Review of Financial Analysis, 12, 173-188.
- MoeinAddin, M., Nayebzadeh, S., & Pour, M. A. (2013). The relationship between liquidity indices and stock returns in companies listed on Tehran stock ex change. Interdisplinary Journal of Contemporary Research in Business, 5(4), 350-360.
- Moradi, N., & Mohebi, M. (2015). The relationship between liquidity risk and stock returns, case study: Oil companies in Tehran stock exchange. Journal UMP Social Sciences and Technology Management, 3(3), 449-455.
- Narayan, P., & Zheng, X. (2011). The relationship between liquidity and returns on the Chinese stock market. Journal of Asian Economies, 22, 259-266.
- Salehi, M., Talebnia, G., & Ghorbani, B. (2011). A study of the relationship between liquidity and stock returns of companies listed in Tehran stock exchange. World Applied Sciences Journal, 9, 1403-1408.
- Shammakhi H. R., & Mehrabi, A. (2016). Study the effect of liquidity of stock on stock returns in companies listed in Tehran stock exchange. International Journal of Economics Commerce and Management, 4(12), 423-434.
- Uddin, M. H. (2009). Re-examination of stock liquidity risk with a relative measure. Studies in Economics and Finance, 21, 24-35.
- Uddin, M. H., & Ann, W. K. (2016). Further test on stock liquidity risk with a relative measure. International Journal in Economics and Business Administration, 4(1), 56-69.
- Vinh, V., & Jonathan, B. (2010). An empirical investigation of liquidity and stock returns relationship in Vietnam stock markets during financial crisis. MPRA Working Paper No. 29862.
![](https://i-scholar.in/public/site/images/abstractview.png)
Abstract Views: 256
![](https://i-scholar.in/public/site/images/pdfview.png)
PDF Views: 0