The Impact of Bank Loan Announcements on Stock Liquidity
We examine the impact of bank loan announcements on stock liquidity. Using a comprehensive loan announcement sample over 14 years in Australia, we find that effective spreads and realized spreads of borrowers’ stocks fall after the announcements. The findings suggest these announcements send positiv...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
Elsevier
2023
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| Online Access: | http://hdl.handle.net/20.500.11937/90444 |
| _version_ | 1848765379864690688 |
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| author | Pham, Thu Phuong Singh, Harminder Vu, Van Hoang |
| author_facet | Pham, Thu Phuong Singh, Harminder Vu, Van Hoang |
| author_sort | Pham, Thu Phuong |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | We examine the impact of bank loan announcements on stock liquidity. Using a comprehensive loan announcement sample over 14 years in Australia, we find that effective spreads and realized spreads of borrowers’ stocks fall after the announcements. The findings suggest these announcements send positive signals about borrowers to the market that increase liquidity provision and reduce transaction costs, leading to improved liquidity for borrowers’ stocks. This liquidity improvement is more pronounced following announcements of new loans than for loan renewals. Overall, our findings provide practical implications for firm managers in the financing decision-making process and market participants in trading strategy adjustment. |
| first_indexed | 2025-11-14T11:34:19Z |
| format | Journal Article |
| id | curtin-20.500.11937-90444 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:34:19Z |
| publishDate | 2023 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-904442025-06-16T03:12:56Z The Impact of Bank Loan Announcements on Stock Liquidity Pham, Thu Phuong Singh, Harminder Vu, Van Hoang 1502 - Banking, Finance and Investment 3502 - Banking, finance and investment We examine the impact of bank loan announcements on stock liquidity. Using a comprehensive loan announcement sample over 14 years in Australia, we find that effective spreads and realized spreads of borrowers’ stocks fall after the announcements. The findings suggest these announcements send positive signals about borrowers to the market that increase liquidity provision and reduce transaction costs, leading to improved liquidity for borrowers’ stocks. This liquidity improvement is more pronounced following announcements of new loans than for loan renewals. Overall, our findings provide practical implications for firm managers in the financing decision-making process and market participants in trading strategy adjustment. 2023 Journal Article http://hdl.handle.net/20.500.11937/90444 10.1016/j.iref.2023.02.009 Elsevier fulltext |
| spellingShingle | 1502 - Banking, Finance and Investment 3502 - Banking, finance and investment Pham, Thu Phuong Singh, Harminder Vu, Van Hoang The Impact of Bank Loan Announcements on Stock Liquidity |
| title | The Impact of Bank Loan Announcements on Stock Liquidity |
| title_full | The Impact of Bank Loan Announcements on Stock Liquidity |
| title_fullStr | The Impact of Bank Loan Announcements on Stock Liquidity |
| title_full_unstemmed | The Impact of Bank Loan Announcements on Stock Liquidity |
| title_short | The Impact of Bank Loan Announcements on Stock Liquidity |
| title_sort | impact of bank loan announcements on stock liquidity |
| topic | 1502 - Banking, Finance and Investment 3502 - Banking, finance and investment |
| url | http://hdl.handle.net/20.500.11937/90444 |