Blockholder Ownership and Market Liquidity

Posted: 27 Dec 2000  

Frank Heflin

University of Georgia - J.M. Tull School of Accounting

Kenneth W. Shaw

University of Missouri at Columbia - School of Accountancy

Abstract

This paper examines the association between block ownership and market liquidity. Blockholders are believed to have access to private, value relevant information via their role 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, and adverse selection spread components, and smaller quoted depths.

JEL Classification: G32, G34, G12, M41

Suggested Citation

Heflin, Frank and Shaw, Kenneth W., Blockholder Ownership and Market Liquidity. As published in Journal of Financial and Quantitative Analysis. Available at SSRN: https://ssrn.com/abstract=249411

Frank Heflin

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States
706-542-1616 (Phone)
706-542-3630 (Fax)

Kenneth W. Shaw (Contact Author)

University of Missouri at Columbia - School of Accountancy ( email )

420 Cornell Hall
Columbia, MO 65211
United States
573-882-5939 (Phone)
573-882-2437 (Fax)

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