Ownership dispersion and market liquidity

Gady Jacoby and Steven X. Zheng

International Review of Financial Analysis, 2010, vol. 19, issue 2, 81-88

Abstract: We revisit the relationship between ownership dispersion and market liquidity. For ownership dispersion, we consider two dimensions: number of shareholders and blockholder ownership. For market liquidity, we consider four categories of liquidity measures: spreads, probability of informed trading (PIN), depth, and volume. Our sample includes NASDAQ firms in addition to NYSE and AMEX firms. We find several relations that are not documented in the extant Finance literature. Overall, our test results are consistent with the idea that higher ownership dispersion improves market liquidity.

Keywords: Block; ownership; Bid-ask; spread; Quoted; depth; Information; asymmetry; PIN (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:19:y:2010:i:2:p:81-88

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