IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v61y2024ics1544612323013314.html

An study of liquidity shock, financial market participation on hollowing behavior of controlling shareholder

Author

Listed:
  • Lu, Xiaoyu
  • Gui, Zhou

Abstract

Agency conflict between controlling shareholders and small and medium-sized shareholders has become a key issue of concern and research in academia. However, existing studies have less thought about external root causes leading to their hollowing out behavior, especially the lack of in-depth research on the role of liquidity shocks in the mechanism between hollowing out behavior and market participation. Based on market participation perspective, empirical evidence from listed companies from 2006 to 2022, this paper empirically finds liquidity shocks significantly inhibit efficiency of controlling shareholders' hollowing out behavior; at the same time, financial market participation strengthens this inhibitory effect.

Suggested Citation

  • Lu, Xiaoyu & Gui, Zhou, 2024. "An study of liquidity shock, financial market participation on hollowing behavior of controlling shareholder," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612323013314
    DOI: 10.1016/j.frl.2023.104959
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323013314
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104959?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Li, Qize & Brounen, Dirk & Li, Jianjun & Wei, Xu, 2022. "Social interactions and Chinese households’ participation in the risky financial market," Finance Research Letters, Elsevier, vol. 49(C).
    2. Yu, Chenyang & Sun, Hanbing & Fu, Changluan, 2022. "Is innovative activity a way to conduct tunneling behavior? Evidence from the seasoned equity offerings of Chinese firms," Finance Research Letters, Elsevier, vol. 46(PB).
    3. Benzennou, Bouchra & ap Gwilym, Owain & Williams, Gwion, 2020. "Commonality in liquidity across options and stock futures markets," Finance Research Letters, Elsevier, vol. 32(C).
    4. Doojin Ryu & Jinyoung Yu, 2022. "Sentiment‐dependent impact of funding liquidity shocks on futures market liquidity," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 42(1), pages 61-76, January.
    5. Vidal-Tomás, David & Tedeschi, Gabriele & Ripollés, Jordi, 2020. "The desertion of rich countries and the mutual support of the poor ones: Preferential lending agreements among the PIGS," Finance Research Letters, Elsevier, vol. 34(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Pengcheng & Yang, Xuelin, 2024. "Social trust and household financial decision-making: An empirical study based on the usage of household financial technology," Finance Research Letters, Elsevier, vol. 70(C).
    2. Wen, Conghua & Jiang, Rui & Lin, Xiao, 2025. "Convertible bond issuance and liquidity of small-cap listed companies," Finance Research Letters, Elsevier, vol. 79(C).
    3. Seok, Sangik & Cho, Hoon & Ryu, Doojin, 2022. "Scheduled macroeconomic news announcements and intraday market sentiment," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    4. Wenyan, Huang & Gooi, Leong-Mow, 2023. "Social support and household stock market participation," Economics Letters, Elsevier, vol. 233(C).
    5. Daeyun Kang & Doojin Ryu & Robert I. Webb, 2025. "Bitcoin as a financial asset: a survey," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-28, December.
    6. Xingguo Luo & Wenye Cai & Doojin Ryu, 2022. "Information contents of intraday SSE 50 ETF options trades," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 42(4), pages 580-604, April.
    7. Libo Yin & Jier Zhang & Hong Cao & Ying Li, 2025. "The Role of Policy on Commodity Markets: From the Perspective of Narrative News Based on NLP," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 45(11), pages 1871-1910, November.
    8. Wenyan, Huang, 2025. "Happiness and stock market participation," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    9. Jie Li & Sheng Li & Alice Y. Ouyang, 2023. "Housing and Wealth Inequality: The Role of Financial Market Participation," Annals of Economics and Finance, Society for AEF, vol. 24(1), pages 141-170, May.
    10. Lee, Geul & Ryu, Doojin, 2025. "Fear of missing out and cryptocurrency miners: Evidence from Dogecoin and Litecoin," Journal of Behavioral and Experimental Finance, Elsevier, vol. 46(C).
    11. Chen, Bo & Zeng, Ning & Tam, Kwo Ping, 2024. "Do social networks affect household financial vulnerability? Evidence from China," Finance Research Letters, Elsevier, vol. 59(C).
    12. Li Jia & Wenjing Lei & Gerrit Antonides, 2025. "Women’s Bargaining Power and Household Stock Investment," Journal of Family and Economic Issues, Springer, vol. 46(4), pages 1117-1133, December.
    13. Zhang, Xiaoliang & Jiang, Jinjin & Liu, Zuxian & Chen, Lijun, 2025. "Cultural blueprint: Uncovering how merchant guild culture shapes corporate innovation," Finance Research Letters, Elsevier, vol. 85(PA).
    14. Francesco Campigli & Gabriele Tedeschi & Maria Cristina Recchioni, 2021. "The talkative variables of the hybrid Heston model: Yields’ maturity and economic (in)stability," Working Papers 2021/03, Economics Department, Universitat Jaume I, Castellón (Spain).
    15. Rintu Anthony & Krishna Prasanna & Vivek Vinod, 2025. "Liquidity Unveiled: Crafting an Index to Decode the Sovereign Bond Market Risk," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 32(3), pages 801-820, September.
    16. Seok, Sangik & Cho, Hoon & Ryu, Doojin, 2024. "Dual effects of investor sentiment and uncertainty in financial markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 300-315.
    17. Aritra Pan & Arun Kumar Misra & David McMillan, 2021. "A comprehensive study on bid-ask spread and its determinants in India," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1898735-189, January.
    18. Yulong Sun & Liangyu Zhu & Dan Hu, 2026. "Fire testing real gold: political following and shareholder-oriented ESG," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(3), pages 7511-7556, March.
    19. Ziyu Zhou & Zhiying Liu & Haizhou Fan, 2026. "Non-actual controller and enterprise technology innovation," Annals of Operations Research, Springer, vol. 359(1), pages 731-753, April.
    20. Jinyoung Yu & Young‐Chul Kim & Doojin Ryu, 2024. "Left‐digit biases: Individual and institutional investors," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 44(3), pages 518-532, March.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612323013314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.