Stock Liquidity and Issuing Activity

60 Pages Posted: 31 Aug 2015 Last revised: 11 Jan 2019

See all articles by Alexander Barinov

Alexander Barinov

University of California Riverside

Date Written: January 9, 2019


The paper shows that issuing activity does not result in superior liquidity. Even the kinds of new issues that are supposed to be more liquid than others (IPOs backed by venture capital, new issues with high-prestige underwriters, severely underpriced IPOs) are just as liquid as their peer non-issuers or other similar issuing companies. The paper thus refutes the existing liquidity-based explanations of the new issues puzzle. The paper also shows that the low-minus-high turnover factor seems to explain the new issues puzzle and related anomalies only because it picks up volatility risk.

Keywords: new issues puzzle, liquidity, stock issuance, volatility risk

JEL Classification: G12, G13, G32, E44

Suggested Citation

Barinov, Alexander, Stock Liquidity and Issuing Activity (January 9, 2019). Available at SSRN: or

Alexander Barinov (Contact Author)

University of California Riverside ( email )

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Riverside, CA 92521
United States
585-698-7726 (Phone)


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