This paper analyzes the incentives of large shareholders to monitor public corporations. We investigate the hypothesis that a liquid stock market reduces large shareholders’ incentives to monitor because it allows them to sell their stocks more easily. Even though this is true, a liquid market also makes it less costly to hold larger stakes
and easier to purchase additional shares. We show that this fact is important if monitoring is costly: market liquidity mitigates the problem that small shareholders free ride on the effort of the large shareholder. We find that liquid stock markets are beneficial because they make corporate governance more effective.
Zusätzliche Informationen:
This is the peer reviewed version of the following article: Maug, Ernst (1998): Large shareholders as monitors : is there a trade-off between liquidity and control? In: The Journal of Finance 53, S. 65–98, which has been published in final form at https://doi.org/10.1111/0022-1082.35053. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.
![[img]](https://madoc.bib.uni-mannheim.de/style/images/fileicons/application_pdf.png)
Suche Autoren in
