Is the price-volume relation asymmetric? Cross sectional evidence from an emerging stock market

Asymmetry in the price-volume relation is investigated using cross-sectional data on the stock prices and trading volume of more than 100 companies listed on the Kuwait Stock Exchange over 11 consecutive weeks. The results show that asymmetry can be concealed by missing variables such as market capitalisation. There is some evidence for asymmetry that takes the form of higher trading volume in a declining market. Some explanations are put forward for the finding of asymmetry.