Bid-Ask Spread, Asymmetric Information and Ultimate Ownership

EFMA 2003 Helsinki

32 Pages Posted: 10 Oct 2002

See all articles by Najah Attig

Najah Attig

Saint Mary's University - Department of Finance & Management Science

Yoser Gadhoum

University of Quebec at Montreal (UQAM) - Department of Business Strategy

Larry H.P. Lang

The Chinese University of Hong Kong (CUHK) - Department of Finance

Abstract

We collect the ultimate ownership data for the 1,167 Canadian traded corporations, for the 1994-1996 period, to examine the relationship between stock liquidity and ultimate ownership structure. Our results suggest that the presence of family increases the bid-ask spread. In addition, the magnitude of the deviation between ultimate ownership and ultimate control at the presence of families is important in determining the bid-ask spread. Furthermore, we document that mechanisms of enhancing control, say pyramid at the presence of families, significantly affect bid-ask spreads.

Keywords: Market liquidity, ultimate ownership, divergence of cash flow right and control right

JEL Classification: G32

Suggested Citation

Attig, Najah and Gadhoum, Yoser and Lang, Hsien Ping Larry, Bid-Ask Spread, Asymmetric Information and Ultimate Ownership. EFMA 2003 Helsinki. Available at SSRN: https://ssrn.com/abstract=332020 or http://dx.doi.org/10.2139/ssrn.332020

Najah Attig

Saint Mary's University - Department of Finance & Management Science ( email )

Halifax, Nova Scotia B3H 3C3
Canada
902-491-8679 (Phone)

Yoser Gadhoum

University of Quebec at Montreal (UQAM) - Department of Business Strategy ( email )

School of Business Administration
Montreal, Quebec H3C 4R2
Canada
514 987 3000, extension 3107 (Phone)

Hsien Ping Larry Lang (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Finance ( email )

Shatin, N.T.
Hong Kong
+85 2 2609 7761 (Phone)
+85 2 2603 6586 (Fax)

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