TITLE:
Illiquidity and the Risk of Stock Market Crash
AUTHORS:
Yaping Wang, Zhaohui Wang, Yi Dang
KEYWORDS:
Stock Market Crash, Illiquidity, Market Risk
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.10 No.2,
February
25,
2020
ABSTRACT: This paper aims to study the impact of illiquidity on the risk of stock market crashes. Through empirical research on daily and weekly data of the Shanghai Composite Index, it is found that high liquidity can relieve the risk of stock market crash. For this reason, this article proposes to establish a stock market liquidity monitoring and early warning mechanisms, rationally control market leverage, and strengthen supervision of hot money.