IES Management College And Research Centre

The Joint Dynamics of Liquidity and Volatility Across Small- and Large- index Indian Funds

Kulshrestha,, Kriti

The Joint Dynamics of Liquidity and Volatility Across Small- and Large- index Indian Funds - 167S-182 S

The article explores the relationship between volatility and liquidity, as there is a change in market capitalisation (cap). Using three regimes of volatility, identified by the threshold vector auto-regression method, the results show that volatility affects liquidity differently for the three volatility regimes during the two periods (crisis and post-crisis) of study. The results show that there is inconsistency in how volatility affects liquidity across the Indian large-, mid- and small-cap indices.

Liquidity volatility India TVAR

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