Number of shareholders and stock prices: Evidence from Japan

Yakov Amihud; Haim Mendelson; Jun Uno

doi:10.1111/0022-1082.00141

Number of shareholders and stock prices: Evidence from Japan

Yakov Amihud, Haim Mendelson, Jun Uno

Research output: Contribution to journal › Article › peer-review

89 Citations (Scopus)

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.

Original language	English
Pages (from-to)	1169-1184
Number of pages	16
Journal	Journal of Finance
Volume	54
Issue number	3
DOIs	https://doi.org/10.1111/0022-1082.00141
Publication status	Published - 1999 Jun
Externally published	Yes

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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