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Information comparability and blockholder structure: The role of trading-based governance

Author

Listed:
  • Xu, Weijun
  • Zhao, Qi
  • Ji, Yucheng
  • Zhu, Mengyuan
  • Pan, Shiliang

Abstract

This study examines how information comparability shapes blockholder structure and corporate governance. We develop a model in which blockholders use cross-firm financial comparisons to inform both voice and trading strategies. Greater comparability improves inference about firm-specific shocks but reduces the ability to detect common shocks, creating a trade-off that affects the profitability of informed trading. Consequently, the number of blockholders follows a hump-shaped relationship with comparability—rising at low levels but declining when comparability is high. The turning point depends on the relative importance of systematic versus idiosyncratic uncertainty. Using data on Chinese A-share listed firms from 2007 to 2023, we find strong empirical support for this prediction. The results are robust across alternative measures and identification strategies and are more pronounced in environments with higher information asymmetry. Overall, the findings highlight unintended effects of disclosure policies on ownership structure.

Suggested Citation

  • Xu, Weijun & Zhao, Qi & Ji, Yucheng & Zhu, Mengyuan & Pan, Shiliang, 2026. "Information comparability and blockholder structure: The role of trading-based governance," Economic Modelling, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:ecmode:v:163:y:2026:i:c:s0264999326002385
    DOI: 10.1016/j.econmod.2026.107709
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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