Market Liquidity and Ownership Structure with Weak Protection for Minority Shareholders: Evidence from Brazil and Chile

Cueto, Diego C.

doi:10.2139/ssrn.1410197

Cited by 6 publications

(2 citation statements)

References 23 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Since average transaction costs depend on the number of shareholders participating in trade, lower free float will increase transaction costs and adversely affect liquidity (Demsetz, 1968). In another related study, Cueto (2009) show that ownership concentration by dominant shareholders result in reducing information asymmetries and, thereby leads to increase in liquidity. Holmström and Tirole (1993) argue that concentrated ownership reduces the benefit of monitoring by stock market participants, thereby reducing the amount of public information.…”

Section: Ownership Concentration and Liquiditymentioning

confidence: 94%

Corporate governance and its effect on the liquidity of a stock: evidence from the MENA region

Farooq

Seffar

2012

IJBGE

View full text Add to dashboard Cite

What causes investors to trade in certain stocks more than the others? We answer this question by documenting significant relationship between various proxies of corporate governance mechanisms and liquidity in the MENA region. Our results show that higher analyst following, lower ownership concentration, and having Big-Four auditors as external auditors lead to higher liquidity. All of these factors are considered to be the proxies of better corporate governance mechanisms. We argue that better corporate governance mechanisms lower the extent of adverse selection problems and therefore lead to higher liquidity. Our results indicate that managers can improve information environment of a firm, if they want to increase tradability of their stocks. Interestingly, our results show a negative relationship between dividend payout ratio and liquidity. Consistent with Banerjee et al. (2007), we argue that frictions in the MENA region stock markets lead to high demand for dividends in less liquid stocks, thereby resulting in negative relationship between the two.Reference to this paper should be made as follows: Farooq, O. and Seffar, M. (2012) 'Corporate governance and its effect on the liquidity of a stock: evidence from the MENA region', Int.

show abstract

Section: Ownership Concentration and Liquiditymentioning

confidence: 94%

Corporate governance and its effect on the liquidity of a stock: evidence from the MENA region

Farooq

Seffar

2012

IJBGE

View full text Add to dashboard Cite

show abstract

“…In fact, insider trading regulations (market-level) and external monitoring by shareholders (firm-level) is justified in large part by the need to ameliorate the problems associated with asymmetric information. While some of these insider trading regulations are specifically designed to help facilitate external monitoring, researchers disagree about their social utility (compare with Li, Moshirian, Pham, & Zein, 2006with Becht, 2003, and Padilla, 2005, even though domestic and international evidence supports the hypothesis that concentrating ownership and liquidity are inversely related (Cueto, 2009: Earle, Kucsera, & Telegdy, 2005Ginglinger & Hamon, 2007;Naes, 2004).…”

Section: Issue 7: Liquidity and The Cost Of Capitalmentioning

confidence: 99%

Essays in insider trading, informational efficiency, and asset pricing

Clark¹

View full text Add to dashboard Cite

Lastly, the third chapter revisits the theoretical justifications for Bossaerts' (2004) ELM, with the goal of providing clear, intuitive proofs of the key results underlying the methodology. The seemingly biggest hurdle to garnering more widespread adoption of the ELM methodology is the confusion that surrounds the use of weighted modified returns when testing for rational asset pricing restrictions. I attack this hurdle by offering a transparent justification for this approach. I then establish how and why Bossaerts' results extend from the case of digital options to the more practically relevant class of all limited-liability securities, including equities. I conclude by showing that the ELM restrictions naturally lend themselves to estimation and testing of asset pricing models, using weighted modified returns, in a Generalized Method of Moments (GMM)

show abstract

Left to their fate: rights of minority equity holders in Ghanaian firms

Agyemang

Aboagye

Frimpong

2015

Society and Business Review

View full text Add to dashboard Cite

Purpose – The purpose of this paper is to examine the rights of shareholders, particularly those of minority shareholders in the management of firms in Ghana. Design/methodology/approach – As a result of the largely unexplored nature of this issue in Ghana, a qualitative analysis was conducted to offer a painstaking understanding needed. The case study design is in particular relevant for exploring such phenomenon, as it evolves through the experiences of several key players. Findings – Data indicate that minority shareholders’ influence is, in most cases, nil in every aspect of their firms. Whilst majority shareholders have an absolute right to appoint or influence the appointment of top officials of the firms, minority shareholders’ role in the selection is limited. In addition, in regards to control of corporate decision-making processes, unlike the majority shareholders, the minority shareholders do not have any influence on them. Further, in terms of relevant information, whilst the majority shareholders have absolute access to them anytime they desire, the minority shareholders only rely on annual general meetings to get hold of them, thus limiting their access to corporate information. The revelations unambiguously grant the majority shareholders of the firms absolute control rights whilst undermining the rights of the minority shareholders. This paper was concluded by itemizing the implications of our findings for management, regulators and governments. Originality/value – It is believed that this is among the handful of studies that have been conducted using developing or emergent economy data to empirically analyse how minority shareholders wield their rights in emergent economies and to add to the mounting pool of scattered cross-country evidence.

show abstract

Market Liquidity and Ownership Structure with Weak Protection for Minority Shareholders: Evidence from Brazil and Chile

Cited by 6 publications

References 23 publications

Corporate governance and its effect on the liquidity of a stock: evidence from the MENA region

Corporate governance and its effect on the liquidity of a stock: evidence from the MENA region

Essays in insider trading, informational efficiency, and asset pricing

Left to their fate: rights of minority equity holders in Ghanaian firms

Contact Info

Product

Resources

About