Blockholder Ownership and Market Liquidity

This paper examines the association between block ownership and market liquidity. Blockholders are believed to have access to private, value-relevant information via their roles as monitors of firms' operations. consistent with this, we find that firms with greater blockholder ownership, either...

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Bibliographic Details
Published inJournal of financial and quantitative analysis Vol. 35; no. 4; pp. 621 - 633
Main Authors Heflin, Frank, Shaw, Kenneth W.
Format Journal Article
LanguageEnglish
Published New York, USA Cambridge University Press 01.12.2000
University of Washington School of Business Administration and New York University Leonard N. Stern School of Business
Subjects
Adverse selection
Bid prices
Bids
Charitable foundations
Coefficients
Common stock
Empirical research
Employee stock ownership plans
ESOP
Estimation methods
Executives
Financial economics
Financial management
Information control
Insider trading
Liquidity
Market prices
Mathematical economics
Prices
Proxy statements
Samples
Shares outstanding
Spread
Stock exchanges
Stockholders
Stocks
Studies
Trade
United States > US
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Summary:This paper examines the association between block ownership and market liquidity. Blockholders are believed to have access to private, value-relevant information via their roles as monitors of firms' operations. consistent with this, we find that firms with greater blockholder ownership, either by managers or external entities, have larger quoted spreads, effective spreads, adverse selection spread components, and smaller quoted depths.
Bibliography:istex:876B75237CC02A5F983CE08796D5F69C7B0F5206
ArticleID:00934
Krannert Graduate School of Management, Purdue University, West Lafayette, IN 47907, and robert H. Smith School of Business, 4467 Van Munching Hall, University of Maryland, College Park, MD 20742, respectively. Heflin thanks the Yale School of Management and the Krannert Graduate School of Management for financial support. Shaw gratefully acknowledges financial support from the Smith School of Business, University of Maryland. the authors thank William Kross, Jonathan Karpoff (the editor), and Dennis Scheehan (the referee) for helpful comments and suggestions.
PII:S0022109000009340
ark:/67375/6GQ-1PQTPBZ5-C
ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0022-1090
1756-6916
DOI:10.2307/2676258