Ownership, control and market liquidity
Hamon, Jacques; Ginglinger, Edith (2007-06), Ownership, control and market liquidity, AFFI 2007 (Association Française de Finance), 2007-0612, Paris, France
TypeCommunication / Conférence
Conference titleAFFI 2007 (Association Française de Finance)
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Abstract (EN)We examine how ownership concentration and the separation of ownership and control affect market liquidity in France. We find that firms with a large insider blockholder exhibit significantly lower liquidity. Different methods of concentrating control affect liquidity in different ways. Pyramid structures negatively affect liquidity for all pyramiding firms. Double voting right shares, a French specific means of control enhancement rewarding long-term shareholders, lead to increased liquidity for outside investors of small, family- firms, by reducing the probability of informed trading.
Subjects / Keywordsbid-ask spread; liquidity; voting rights; pyramids; ultimate control; ownership
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