Stock splits represent corporate cosmetic events which should theoretically not alter the fundamentals of a company. However, extensive literature analyses the effects of stock splits on publicly traded companies’ capitalization, liquidity and ownership structure. Applying the methodology used by academic experts studying the NYSE and NASDAQ stock exchange markets, we analyze a sample of Spanish companies which undertook a split between 2001 and 2018. Our aim is to examine the effects that stock split events generate on the liquidity of publicly traded Spanish companies and compare the results with previous literature. Using as a proxy of liquidity the percentage bid-ask spread, our findings suggest that stock splits damage the liquidity of the security traded.

Treball de Fi de Grau en Estudis Internacionals d'Economia i Empresa. Curs 2020-2021

Tutor: Xavier Freixas Dargallo