Institutional Determinants of Bid Ask Spreads in Caribbean Offshore Stock Exchanges

Research in International Business and Finance,58, 101507, 2021

53 Pages Posted: 1 Apr 2022

See all articles by Bruce Allen Hearn

Bruce Allen Hearn

University of Southampton; University of Bradford - School of Management

Date Written: February 9, 2021

Abstract

Our study contrasts the influence of firm level adoption of shareholder value governance against that of formal institutional quality on listed firm’s bid ask spread in a unique sample of eight Caribbean offshore stock exchanges. Using panel data from 146 listed firms from 2004 to 2017 our findings reveal the importance of Worldwide Governance Indicator dimensions of corruption control and regulatory quality in explaining firm’s bid ask spreads. Furthermore, formal institutional quality is consistently statistically superior in explaining firm’s bid ask spreads than firm level governance adoption. Our findings emphasise the importance in considering political economy in offshore financial markets

Keywords: Offshore stock exchanges; tax havens; small stock markets; Caribbean; liquidity

Suggested Citation

Hearn, Bruce Allen, Institutional Determinants of Bid Ask Spreads in Caribbean Offshore Stock Exchanges (February 9, 2021). Research in International Business and Finance,58, 101507, 2021, Available at SSRN: https://ssrn.com/abstract=4030154

Bruce Allen Hearn (Contact Author)

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

University of Bradford - School of Management ( email )

Emm Lane
Bradford, West Yorkshire Bd9 4JL
United Kingdom

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