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Liquidity, ownership concentration, corporate governance, and firm value: Evidence from Thailand

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  • Prommin, Panu
  • Jumreornvong, Seksak
  • Jiraporn, Pornsit
  • Tong, Shenghui

Abstract

We examine the interactions among ownership structure, liquidity, and corporate governance in an important emerging market. The results suggest that firms with more concentrated ownership experience significantly lower stock liquidity. Large shareholders are assumed to possess private information, leading to information asymmetry and thus a higher adverse selection cost. As a result, higher ownership concentration is associated with less liquidity. Nevertheless, there is no evidence that corporate governance plays a significant role in the relationship between ownership and liquidity in Thailand.

Suggested Citation

  • Prommin, Panu & Jumreornvong, Seksak & Jiraporn, Pornsit & Tong, Shenghui, 2016. "Liquidity, ownership concentration, corporate governance, and firm value: Evidence from Thailand," Global Finance Journal, Elsevier, vol. 31(C), pages 73-87.
  • Handle: RePEc:eee:glofin:v:31:y:2016:i:c:p:73-87
    DOI: 10.1016/j.gfj.2016.06.006
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    More about this item

    Keywords

    Ownership; Ownership structure; Liquidity; Thailand; Emerging markets;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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