Abstract
Liquidity risk is one of the important risk in financial risk management. It is important to even a small firm until to the big financial institutions like bank. It has become increasingly important to measure, manage and assess the impact of liquidity risk on the economics of every firm. liquidity risk has been crucial for financial institutions and for the stability of the financial system. The financial crisis has promoted the adoption of much more advanced liquidity risk management policies and liquidity risk measurement methodologies. This study attempted to investigate the influence of firm-specific factors and macro-economic factors affecting liquidity risk of Bosideng International Holding Limited. This study employs time series regression analysis this firm from 2012 to 2016. The analysis shows that firm-specific factors (average collection period) and macro-economic factor (company’s beta) influence the liquidity risk of the firms. This study suggest that the firms should manage their account receivable efficiently by establishing a clear credit.
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