Number of shareholders and stock prices: Evidence from Japan

Yakov Amihud, Haim Mendelson, Jun Uno

Research output: Contribution to journalArticlepeer-review

100 Citations (Scopus)


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
Issue number3
Publication statusPublished - 1999 Jun
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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