Download or read book Ownership Structure and Stock Market Liquidity written by Randi Næs and published by . This book was released on 2004 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Ownership Structure and Stock Market Liquidity written by Atulya Sarin and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We empirically examine the relationship between liquidity and the fraction of the firm owned by insiders and institutions. The bid-ask spread is a direct cost of transacting and we use it as one measure of stock liquidity. Lee, Mucklow and Ready (1993) point out that, in addition to bid-ask spread, quoted depth is also part of the stock market quote and that specialists actively manage adverse selection risk by adjusting both spread and depth. We find that both higher insider and institutional ownership are associated with wider spread and smaller quoted depth. Our results also suggest that for higher insider ownership the loss of liquidity is a consequence of adverse selection costs and for higher institutional ownership is a result of higher inventory carrying costs.
Download or read book Financing Patterns Around the World written by Thorsten Beck and published by World Bank Publications. This book was released on 2002 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a firm-level survey database covering 48 countries, Beck, Demirgüç-Kunt, and Maksimovic investigate whether differences in financial and legal development affect the way firms finance their investments. The results indicate that external financing of investments is not a function of institutions, although the form of external finance is. The authors identify two explanations for this. First, legal and financial institutions affect different types of external finance in offsetting ways. Second, firm size is an important determinant of whether firms can have access to different types of external finance. Larger firms with financing needs are more likely to use external finance compared with small firms. The results also indicate that these firms are more likely to use external finance in more developed financial systems, particularly debt and equity finance. The authors also find evidence consistent with the pecking order theory in financially developed countries, particularly for large firms. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to understand firms' access to financial services.
Download or read book Disproportional Ownership Structure and Stock Market Liquidity in China written by Qigui Liu and published by . This book was released on 2016 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect that disproportional ownership has on stock market liquidity using a sample of Chinese listed firms. We find that the controlling shareholders' excess control rights are negatively associated with market liquidity. We also provide evidence to show that the negative relationship between disproportional ownership and liquidity is stronger when the firms' ultimate owner is the state or where legal protection for minority shareholders is weak; both of which result in a more severe agency problem. In addition, we find that as more non-tradable shares by controlling shareholders became tradable, the negative effect of disproportional ownership on liquidity became less. This relationship between disproportional ownership and liquidity remains even when the trading activities of controlling shareholders are controlled. We argue that in transition economies such as China, controlling shareholders usually have a strong incentive to disclose poor information in order to pursue their private benefit, which reduces market liquidity, while state ownership and weak shareholder protection makes this situation worse.
Download or read book Equity Markets in Action written by Robert A. Schwartz and published by John Wiley & Sons. This book was released on 2004-10-06 with total page 482 pages. Available in PDF, EPUB and Kindle. Book excerpt: An in-depth look at the nature of market making and exchanges From theory to practicalities, this is a comprehensive, up-to-date handbook and reference on how markets work and the nuances of trading. It includes a CD with an interactive trading simulation. Robert A. Schwartz, PhD (New York, NY), is Marvin M. Speiser Professor of Finance and University Distinguished Professor in the Zicklin School of Business, Baruch College, CUNY. Reto Francioni, PhD (Zurich, Switzerland), is President and Chairman of the Board of SWX, the Swiss Stock Exchange, and former co-CEO of Consors Discount Broker AG, Nuremberg.
Download or read book Stock Market Liquidity in Chile written by Mr.Luis Brandao-Marques and published by International Monetary Fund. This book was released on 2016-11-16 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chile has a large but relatively illiquid stock market. Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities. Evidence from a cross-section of emerging markets suggests strong protection of minority shareholders can help improve stock market liquitidity. Currently, illiquid in Chilean may have to pay 31⁄2 percent more as cost of equity. Corporate governance should be improved, namely through the adoption of a stewardship code.
Download or read book The Decision to Delist from the Stock Market written by Barbara Fidanza and published by Springer. This book was released on 2018-09-29 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an organized and organic way, this book covers all the possible theoretical and empirical facets of delisting, adding to the well-developed literature on IPOs. IPO and delisting are strictly related; the reasons for delisting may be found in the loss of the incentives that drove the firm to the public market in the past. However, the book presents unique motivations not directly related to the IPO decision. This book covers what the existing literature has not in focusing on specific aspects such as market liquidity and microstructure, listing costs, market for corporate control, corporate governance issues and so on. Of interest to academics and students, this contribution puts all pieces in order and finds a thread that can link each theory to the others.
Download or read book Liquidity Markets and Trading in Action written by Deniz Ozenbas and published by Springer Nature. This book was released on 2022 with total page 111 pages. Available in PDF, EPUB and Kindle. Book excerpt: This open access book addresses four standard business school subjects: microeconomics, macroeconomics, finance and information systems as they relate to trading, liquidity, and market structure. It provides a detailed examination of the impact of trading costs and other impediments of trading that the authors call rictions It also presents an interactive simulation model of equity market trading, TraderEx, that enables students to implement trading decisions in different market scenarios and structures. Addressing these topics shines a bright light on how a real-world financial market operates, and the simulation provides students with an experiential learning opportunity that is informative and fun. Each of the chapters is designed so that it can be used as a stand-alone module in an existing economics, finance, or information science course. Instructor resources such as discussion questions, Powerpoint slides and TraderEx exercises are available online.
Download or read book Institutional Ownership Liquidity and Liquidity Risk written by Prasun Agarwal and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I focus on examining the effects of institutional ownership on stocks' liquidity and liquidity risk using a sample of firms listed on the NYSE and the AMEX over the period 1980-2005. The first chapter provides a brief introduction to liquidity and emphasizes the role of institutional ownership in financial markets. In the second chapter, I examine the relationship between institutional ownership and liquidity of stocks, focusing on the effect of institutions' relative information advantage. The information advantage of institutions can affect liquidity through two channels: decreasing liquidity resulting from increasing information asymmetry (adverse selection effect) and increasing liquidity resulting from increasing price discovery due to competition among institutions' information efficiency effect. My evidence indicates a non-monotonic (U-shaped) relationship between the level of institutional ownership and stock liquidity. The two effects vary with the amount of publicly available information and asset risk. I also find that institutional ownership (Granger) causes liquidity, allaying concerns that the findings result from institutions' preference for liquid stocks. Lastly, I document that liquidity decreases with increasing diversification of the portfolio of institutional investors and the fraction of equity held by long-term investors. In the third chapter, I examine the effects of institutional ownership on stocks' time variation in liquidity. It helps advance an understanding of the sources of commonality in liquidity and the determinants of the sensitivity of an asset's liquidity to changes in marketwide liquidity (systematic liquidity risk) and the total variance of liquidity of a firm over time. I interpret my findings in the context of correlated trading by institutions resulting either from their tendency to herd or to trade on common information and signals. I find that systematic liquidity risk increases with the level of institutional ownership, homogeneity and investment-horizon of the institutional investor base, while it decreases with ownership concentration and increase in blockholdings. However, the variance of liquidity decreases with the level of institutional ownership, homogeneity of the investor base and ownership concentration. Overall, the findings indicate that the ownership structure of stocks affects both the systematic liquidity risk and the variation in their liquidity over time.
Download or read book Ownership Disclosure Ownership Structure and Stock Liquidity written by Sarah Kröchert and published by . This book was released on 2019 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the impact of stricter ownership disclosure rules on ownership structure and stock liquidity. The analysis relies on privately reported holdings and a stock market with a disclosure regime in only one segment. Consistent with prior research, I show that mutual funds decrease their holdings when the initial disclosure threshold is lowered. Extending prior research, I further show that non-financial corporations increase their holdings and thus replace mutual funds. This shift in ownership structure weakens the positive relation between disclosure and liquidity, suggesting that mandatory ownership disclosure can be costly not only for disclosing but also for non-disclosing investors.
Download or read book Market Liquidity written by Thierry Foucault and published by Oxford University Press. This book was released on 2023 with total page 531 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The process by which securities are traded is very different from the idealized picture of a frictionless and self-equilibrating market offered by the typical finance textbook. This book offers a more accurate and authoritative take on this process. The book starts from the assumption that not everyone is present at all times simultaneously on the market, and that participants have quite diverse information about the security's fundamentals. As a result, the order flow is a complex mix of information and noise, and a consensus price only emerges gradually over time as the trading process evolves and the participants interpret the actions of other traders. Thus, a security's actual transaction price may deviate from its fundamental value, as it would be assessed by a fully informed set of investors. The book takes these deviations seriously, and explains why and how they emerge in the trading process and are eventually eliminated. The authors draw on a vast body of theoretical insights and empirical findings on security price formation that have come to form a well-defined field within financial economics known as "market microstructure." Focusing on liquidity and price discovery, the book analyzes the tension between the two, pointing out that when price-relevant information reaches the market through trading pressure rather than through a public announcement, liquidity may suffer. It also confronts many striking phenomena in securities markets and uses the analytical tools and empirical methods of market microstructure to understand them. These include issues such as why liquidity changes over time and differs across securities, why large trades move prices up or down, and why these price changes are subsequently reversed, and why we observe temporary deviations from asset fair values"--
Download or read book Ownership Concentration and Stock Liquidity in an Emerging Market written by Nam Tran and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the liquidity influence of ownership concentration in the Vietnamese stock market where equity holdings are highly concentrated and under weak protection for minority shareholders. We find that stocks of firms with higher concentrated ownership are less traded in terms of lower share turnover and trading volume. This effect implies the real friction channel, rather than the information friction channel, of ownership concentration impairing stock liquidity. It is from the emerging market context of Vietnam that large shareholders are usually institutional investors who have long-term investment horizons. The result is robust to the different types of blockholders, alternative measures of ownership concentration and stock liquidity, and several regression estimators. It is arguable that Vietnamese firms face a trade-off between the monitoring benefit and the liquidity detriment when opting for concentrated ownership structures.
Download or read book Liquidity and Asset Prices written by Yakov Amihud and published by Now Publishers Inc. This book was released on 2006 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: Liquidity and Asset Prices reviews the literature that studies the relationship between liquidity and asset prices. The authors review the theoretical literature that predicts how liquidity affects a security's required return and discuss the empirical connection between the two. Liquidity and Asset Prices surveys the theory of liquidity-based asset pricing followed by the empirical evidence. The theory section proceeds from basic models with exogenous holding periods to those that incorporate additional elements of risk and endogenous holding periods. The empirical section reviews the evidence on the liquidity premium for stocks, bonds, and other financial assets.
Download or read book Corporate Governance Financial Markets and Global Convergence written by Morten Balling and published by Springer Science & Business Media. This book was released on 2013-11-11 with total page 358 pages. Available in PDF, EPUB and Kindle. Book excerpt: for many years been heavily dependent on bank financing, and this situation has not changed fundamentally. In his paper on stock exchange governance in the European Union Guido Ferrarini discusses the relative merits of member and investor ownership and compares stock exchange regulation in a number of EU countries. Faced with increasing competition amongst themselves and against other enterprises that offer transaction services, such as proprietary trading systems, it is essential for European stock exchanges to improve their efficiency and to generate volume. Large investments in new information technology are necessary in order to preserve competitiveness in agIobaI financial market. The implementation of the ISD has accelerated cross-border transaction activity of member firms and investors and strengthened the pressure for convergence of national stock exchange laws in the EU. In their paper, Francesco Giavazzi and Marco Battaglini look at the role played by banks in privatization processes. Banks can be involved in such processes in several ways. They may themselves be the objects of privatization since in many countries a significant fraction of the banking industry is publicly owned. This is the case in France, Spain and Italy. But banks can also be important buyers of the equity of industrial firms sold by the government if they are allowed to do so. The authors characterize privatizations as a very good opportunity to set up the right environment for the development of new financial intermediaries and in general for asound corporate governance system.
Download or read book Ownership Structure Liquidity Demand and Shareholder Monitoring written by Charles M. Kahn and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Major shareholders can choose between undertaking costly actions that improve firm value (quot;monitoringquot;) and trading on private information. If investors face some chance of liquidity needs, share prices do not fully reveal how much monitoring occurs; thus, higher liquidity demand makes selling out more attractive than monitoring, decreasing monitoring and firm value. Higher liquidity demand also increases a major shareholder's incentive to gather additional costly information for use in trading; since informed trading is zero sum, this further decreases overall social welfare. Increasing the large shareholder's stake in the firm may not reduce this problem if the benefit/cost ratio for gathering speculative information exceeds that for monitoring. If other large investors can also gather speculative information, the major shareholder's gains from informed trading decrease, making monitoring more attractive. Nevertheless, such additional speculative activity is costly, offsetting its positive impact on monitoring. We discuss the implications of these results for the choice of ownership structure and market liquidity across firms, industries, and financial systems.
Download or read book A Survey of the European IPO Market written by and published by CEPS. This book was released on 2006 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Effects of Corporate Governance Quality and Ownership Structure on Stock Liquidity written by Abdulateif Almulhim and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
