Does Stock Liquidity Enhance or Impede Firm Innovation?
利用监管变化带来的流动性外生变动，采用双重差分法发现股票流动性增加会减少企业未来创新，原因在于流动性增加了被恶意收购的风险和被动机构投资者的持股。
ABSTRACT We aim to tackle the longstanding debate on whether stock liquidity enhances or impedes firm innovation. This topic is of interest because innovation is crucial for firm‐ and national‐level competitiveness and stock liquidity can be altered by financial market regulations. Using a difference‐in‐differences approach that relies on the exogenous variation in liquidity generated by regulatory changes, we find that an increase in liquidity causes a reduction in future innovation. We identify two possible mechanisms through which liquidity impedes innovation: increased exposure to hostile takeovers and higher presence of institutional investors who do not actively gather information or monitor.