Journal of Finance Vol. 54 No. 3 1999
Number of Shareholders and Stock Prices: Evidence from Japan
Abstract
Merton (1987) proposes that an increase in a firm's investor base increases the firm's value. In Japan, companies can reduce their stock's minimum trading unit—the number of shares in a “round lot”—which facilitates trading in the stock by small investors. We find that a reduction in the minimum trading unit greatly increases a firm's base of individual investors and its stock liquidity, and is associated with a significant increase in the stock price. Further, the stock price appreciation is positively related to an increase in the number of shareholders.
- DOI
- 10.1111/0022-1082.00141
- Volume
- 54
- Issue
- 3
- Pages
- 1169-1184
- Language
- en
- Sources
- crossref openalex