Number of shareholders and stock prices: Evidence from Japan

Yakov Amihud, Haim Mendelson, Jun Uno

Research output: Contribution to journalArticle

83 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 languageEnglish
Pages (from-to)1169-1184
Number of pages16
JournalJournal of Finance
Volume54
Issue number3
Publication statusPublished - 1999 Jun
Externally publishedYes

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Japan
Stock prices
Shareholders
Investors
Firm value
Individual investors
Liquidity

ASJC Scopus subject areas

  • Accounting
  • Economics and Econometrics
  • Finance

Cite this

Number of shareholders and stock prices : Evidence from Japan. / Amihud, Yakov; Mendelson, Haim; Uno, Jun.

In: Journal of Finance, Vol. 54, No. 3, 06.1999, p. 1169-1184.

Research output: Contribution to journalArticle

Amihud, Y, Mendelson, H & Uno, J 1999, 'Number of shareholders and stock prices: Evidence from Japan', Journal of Finance, vol. 54, no. 3, pp. 1169-1184.
Amihud, Yakov ; Mendelson, Haim ; Uno, Jun. / Number of shareholders and stock prices : Evidence from Japan. In: Journal of Finance. 1999 ; Vol. 54, No. 3. pp. 1169-1184.
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