Corporate Ownership, Governance and Timeliness of Price Discovery

Posted: 14 Apr 2016

See all articles by Wenxuan Liu

Wenxuan Liu

Queensland University of Technology

Janice C. Y. How

Queensland University of Technology; Financial Research Network (FIRN)

Peter Verhoeven

Queensland University of Technology - QUT Business School; Financial Research Network (FIRN)

Date Written: October 26, 2014

Abstract

This paper examines how corporate ownership and governance relate to the timeliness of price discovery, referred to as the speed of incorporation of value-relevant information into the stock price. Using a panel data of 1,138 Australian firm-year observations from 2001 to 2008, we predict and find a non-linear relationship between ownership concentration and the timeliness of price discovery. Although there is a positive association between corporate governance and the timeliness of price discovery, we find no evidence of an interaction effect between corporate governance and ownership concentration. Of the various identity groups of largest shareholders examined, only family-controlled firms exhibit more timely price discovery. Having a second largest shareholder does not materially affect the timeliness of price discovery.

Suggested Citation

Liu, Wenxuan and How, Janice C. Y. and Verhoeven, Peter, Corporate Ownership, Governance and Timeliness of Price Discovery (October 26, 2014). FIRN Research Paper No. 2769676. Available at SSRN: https://ssrn.com/abstract=2679676

Wenxuan Liu (Contact Author)

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Janice C. Y. How

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Peter Verhoeven

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Register to save articles to
your library

Register

Paper statistics

Abstract Views
234
PlumX Metrics