Assessment of the Factors Influencing Stock Market Liquidity in China

Abstract

The stock market is an important part of China's capital market and can influence the state of the national economy. In turn, liquidity is the basis on which the stock market survives and operates. Therefore, it is necessary to study stock market liquidity. This thesis focuses on the impact of five selected factors, namely ROE, EPS, unemployment rate, GDP and money supply, on the liquidity of the stock market and uses the turnover rate of stocks to measure the liquidity of the stock market. A multiple regression model of liquidity and the influencing factors is obtained through linear regression analysis, and it is concluded that ROE and unemployment rate have a positive relationship with stock market liquidity, while EPS has a negative relationship with stock market liquidity.