The effect of privatization on the liquidity of stocks listed on the Tehran Stock Exchange

Abstract

Liquidity in the financial and securities markets, the number of securities traded at the lowest cost and lowest price changes shed. Since the liquidity of lower (illiquidity) a share, means high investment risk for investors and consequently the expected rate of return more to shareholders, thus reducing liquidity or increase of liquidity financing through the issue of the stock is relatively "makes undesirable. The privatization process of administrative, financial and legal that governments in many countries to carry out reforms in the economy and state administration run. This study examines the role of privatization on stock market liquidity Tehran Stock Exchange. Research estimates Eviews software and using panel data (panel data) was performed. The results of hypothesis testing using stock turnover and Myhvd criteria, indicates that there is a significant relationship between privatization and market liquidity. It also indicates that the liquidity boom in the stock market index over the period of stagnation due to market liquidity is more intense.