IDEAS home Printed from https://ideas.repec.org/a/eee/jbfina/v31y2007i12p3621-3645.html
   My bibliography  Save this article

Price differences between equity classes. Corporate control, foreign ownership or liquidity?

Author

Listed:
  • Odegaard, Bernt Arne

Abstract

No abstract is available for this item.

Suggested Citation

  • Odegaard, Bernt Arne, 2007. "Price differences between equity classes. Corporate control, foreign ownership or liquidity?," Journal of Banking & Finance, Elsevier, vol. 31(12), pages 3621-3645, December.
    • Handle: RePEc:eee:jbfina:v:31:y:2007:i:12:p:3621-3645
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378-4266(07)00093-3
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lehn, Kenneth & Netter, Jeffry & Poulsen, Annette, 1990. "Consolidating corporate control*1: Dual-class recapitalizations versus leveraged buyouts," Journal of Financial Economics, Elsevier, vol. 27(2), pages 557-580, October.
    2. Domowitz, Ian & Glen, Jack & Madhavan, Ananth, 1997. "Market Segmentation and Stock Prices: Evidence from an Emerging Market," Journal of Finance, American Finance Association, vol. 52(3), pages 1059-1085, July.
    3. Jianping Mei & Jose A. Scheinkman & Wei Xiong, 2009. "Speculative Trading and Stock Prices: Evidence from Chinese A-B Share Premia," Annals of Economics and Finance, Society for AEF, vol. 10(2), pages 225-255, November.
    4. Shmuel Hauser, 2004. "The Value of Voting Rights to Majority Shareholders: Evidence from Dual-Class Stock Unifications," The Review of Financial Studies, Society for Financial Studies, vol. 17(4), pages 1167-1184.
    5. Robert Neumann, 2003. "Price Differentials between Dual‐class Stocks: Voting Premium or Liquidity Discount?," European Financial Management, European Financial Management Association, vol. 9(3), pages 315-332, September.
    6. Luigi Zingales, 1995. "What Determines the Value of Corporate Votes?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1047-1073.
    7. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation," Scholarly Articles 29407535, Harvard University Department of Economics.
    8. Becht, Marco & Bolton, Patrick & Roell, Ailsa, 2003. "Corporate governance and control," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 1, pages 1-109, Elsevier.
    9. Ang, James S & Megginson, William L, 1989. "Restricted Voting Shares, Ownership Structure, and the Market Value of Dual-Class Firms," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 12(4), pages 301-318, Winter.
    10. Zingales, Luigi, 1994. "The Value of the Voting Right: A Study of the Milan Stock Exchange Experience," The Review of Financial Studies, Society for Financial Studies, vol. 7(1), pages 125-148.
    11. Wang, Steven Shuye & Jiang, Li, 2004. "Location of trade, ownership restrictions, and market illiquidity: Examining Chinese A- and H-shares," Journal of Banking & Finance, Elsevier, vol. 28(6), pages 1273-1297, June.
    12. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    13. Muravyev, Alexander, 2004. "The puzzle of dual class stock in Russia: Explaining the price differential between common and preferred shares," MPRA Paper 27726, University Library of Munich, Germany.
    14. Megginson, William L, 1990. "Restricted Voting Stock, Acquisition Premiums, and the Market Value of Corporate Control," The Financial Review, Eastern Finance Association, vol. 25(2), pages 175-198, May.
    15. Hung-Gay Fung & Wai Lee & Wai Kin Leung, 2000. "Segmentation Of The A- And B-Share Chinese Equity Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 23(2), pages 179-195, June.
    16. Ingolf Dittmann & Niels Ulbricht, 2008. "Timing and Wealth Effects of German Dual Class Stock Unifications," European Financial Management, European Financial Management Association, vol. 14(1), pages 163-196, January.
    17. Cox, Steven R. & Roden, Dianne M., 2002. "The source of value of voting rights and related dividend promises," Journal of Corporate Finance, Elsevier, vol. 8(4), pages 337-351, October.
    18. R. Charles Moyer & Ramesh Rao & Phillip M. Sisneros, 1992. "Substitutes for Voting Rights: Evidence From Dual Class Recapitalizations," Financial Management, Financial Management Association, vol. 21(3), Fall.
    19. Jarrell, Gregg A. & Poulsen, Annette B., 1988. "Dual-class recapitalizations as antitakeover mechanisms : The recent evidence," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 129-152, January.
    20. Ma, Xianghai, 1996. "Capital controls, market segmentation and stock prices: Evidence from the Chinese stock market," Pacific-Basin Finance Journal, Elsevier, vol. 4(2-3), pages 219-239, July.
    21. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
    22. Smith, Brian F. & Amoako-Adu, Ben, 1995. "Relative Prices of Dual Class Shares," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 30(2), pages 223-239, June.
    23. Lucian A. Bebchuk & Reinier Kraakman & George Triantis, 2000. "Stock Pyramids, Cross-Ownership, and Dual Class Equity: The Mechanisms and Agency Costs of Separating Control from Cash-Flow Rights," NBER Chapters, in: Concentrated Corporate Ownership, pages 295-318, National Bureau of Economic Research, Inc.
    24. Poterba, James M., 1986. "The market valuation of cash dividends : The citizens utilities case reconsidered," Journal of Financial Economics, Elsevier, vol. 15(3), pages 395-405, March.
    25. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    26. Bailey, Warren & Chung, Y. Peter & Kang, Jun-koo, 1999. "Foreign Ownership Restrictions and Equity Price Premiums: What Drives the Demand for Cross-Border Investments?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 34(4), pages 489-511, December.
    27. Morck, Randall K. (ed.), 2000. "Concentrated Corporate Ownership," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226536781, November.
    28. Rydqvist, Kristian, 1996. "Takeover bids and the relative prices of shares that differ in their voting rights," Journal of Banking & Finance, Elsevier, vol. 20(8), pages 1407-1425, September.
    29. Li, Yuming & Yan, Daying & Greco, Joe, 2006. "Market segmentation and price differentials between A shares and H shares in the Chinese stock markets," Journal of Multinational Financial Management, Elsevier, vol. 16(3), pages 232-248, July.
    30. Bailey, Warren & Jagtiani, Julapa, 1994. "Foreign ownership restrictions and stock prices in the Thai capital market," Journal of Financial Economics, Elsevier, vol. 36(1), pages 57-87, August.
    31. Pekka T. Hietala, 1989. "Asset Pricing in Partially Segmented Markets: Evidence from the Finnish Market," Journal of Finance, American Finance Association, vol. 44(3), pages 697-718, July.
    32. Gardiol, Lucien & Gibson-Asner, Rajna & Tuchschmid, Nils S., 1997. "Are liquidity and corporate control priced by shareholders? Empirical evidence from Swiss dual class shares," Journal of Corporate Finance, Elsevier, vol. 3(4), pages 299-323, December.
    33. Chen, G M & Lee, Bong-Soo & Rui, Oliver, 2001. "Foreign Ownership Restrictions and Market Segmentation in China's Stock Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(1), pages 133-155, Spring.
    34. Lease, Ronald C. & McConnell, John J. & Mikkelson, Wayne H., 1983. "The market value of control in publicly-traded corporations," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 439-471, April.
    35. Taylor, Stephen & Whittred, Greg, 1998. "Security design and the allocation of voting rights: Evidence from the Australian IPO market," Journal of Corporate Finance, Elsevier, vol. 4(2), pages 107-131, June.
    36. Bailey, Warren Bernard, 1988. " Canada's Dual Class Shares: Further Evidence on the Market Value of Cash Dividends," Journal of Finance, American Finance Association, vol. 43(5), pages 1143-1160, December.
    37. William Goetzmann & Matthew Spiegel & Andrey Ukhov, 2002. "Modeling and Measuring Russian Corporate Governance: The Case of Russian Preferred and Common Shares (English Version)," Yale School of Management Working Papers ysm278, Yale School of Management, revised 01 Oct 2002.
    38. Fung, Hung-Gay & Lee, Wai & Leung, Wai Kin, 2000. "Segmentation of the A- and B-Share Chinese Equity Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 23(2), pages 179-195, Summer.
    39. Chung, Shifei & Wei, Peihwang, 2005. "The relationship between bid-ask spreads and holding periods: The case of Chinese A and B shares," Global Finance Journal, Elsevier, vol. 15(3), pages 239-249, February.
    40. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
    41. Olaf Ehrhardt & Jan Kuklinski & Eric Nowak, 2006. "Unifications of Dual-Class Shares in Germany Empirical Evidence on the Effects ofRelated Changes in Ownership Structure, Market Value, and Bid-Ask Spreadsnce from the German Stock Market," Swiss Finance Institute Research Paper Series 06-12, Swiss Finance Institute.
    42. Long, John Jr., 1978. "The market valuation of cash dividends : A case to consider," Journal of Financial Economics, Elsevier, vol. 6(2-3), pages 235-264.
    43. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    44. Smart, Scott B. & Zutter, Chad J., 2003. "Control as a motivation for underpricing: a comparison of dual and single-class IPOs," Journal of Financial Economics, Elsevier, vol. 69(1), pages 85-110, July.
    45. Doidge, Craig, 2004. "U.S. cross-listings and the private benefits of control: evidence from dual-class firms," Journal of Financial Economics, Elsevier, vol. 72(3), pages 519-553, June.
    46. James S. Ang & William L Megginson, 1989. "Restricted Voting Shares, Ownership Structure, And The Market Value Of Dual-Class Firms," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 12(4), pages 301-318, December.
    47. Hubbard, Jeff & Michaely, Roni, 1997. "Do Investors Ignore Dividend Taxation? A Reexamination of the Citizens Utilities Case," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 32(1), pages 117-135, March.
    48. Maureen O'Hara, 2003. "Presidential Address: Liquidity and Price Discovery," Journal of Finance, American Finance Association, vol. 58(4), pages 1335-1354, August.
    49. Jianping Mei & Jose Scheinkman & Wei Xiong, 2005. "Speculative Trading and Stock Prices: An Analysis of Chinese A-B Share Premia," Levine's Bibliography 122247000000000867, UCLA Department of Economics.
    50. Harris, Milton & Raviv, Artur, 1989. "The design of securities," Journal of Financial Economics, Elsevier, vol. 24(2), pages 255-287.
    51. Harris, Milton & Raviv, Artur, 1988. "Corporate governance : Voting rights and majority rules," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 203-235, January.
    52. Sun, Qian & Tong, Wilson H. S., 2000. "The effect of market segmentation on stock prices: The China syndrome," Journal of Banking & Finance, Elsevier, vol. 24(12), pages 1875-1902, December.
    53. Bailey, Warren, 1994. "Risk and return on China's new stock markets: Some preliminary evidence," Pacific-Basin Finance Journal, Elsevier, vol. 2(2-3), pages 243-260, May.
    54. Øyvind Bøhren & Bernt Arne Ødegaard, 2001. "Patterns of Corporate Ownership: Insights from a unique data set," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 27, pages 55-86.
    55. Amoako-Adu, Ben & Smith, Brian F., 2001. "Dual class firms: Capitalization, ownership structure and recapitalization back into single class," Journal of Banking & Finance, Elsevier, vol. 25(6), pages 1083-1111, June.
    56. DeAngelo, Harry & DeAngelo, Linda, 1985. "Managerial ownership of voting rights : A study of public corporations with dual classes of common stock," Journal of Financial Economics, Elsevier, vol. 14(1), pages 33-69, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Massimiliano Celli, 2017. "Minority Discount for Reduced Powers in Negotiations of Non-Listed Minority Holdings: Evidence from European Countries," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(4), pages 1-23, March.
    2. Ødegaard, Bernt Arne, 2009. "The diversification cost of large, concentrated equity stakes. How big is it? Is it justified?," Finance Research Letters, Elsevier, vol. 6(2), pages 56-72, June.
    3. Choi, Hyang Mi & Yoon, Pyung-Sig & Lim, Byungkwon, 2023. "Corporate governance and price differences between dual-class shares in Korea," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 304-319.
    4. King, Michael R. & Santor, Eric, 2008. "Family values: Ownership structure, performance and capital structure of Canadian firms," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2423-2432, November.
    5. Mike Burkart & Samuel Lee, 2008. "One Share - One Vote: the Theory," Review of Finance, European Finance Association, vol. 12(1), pages 1-49.
    6. Bigelli, Marco & Croci, Ettore, 2013. "Dividend privileges and the value of voting rights: Evidence from Italy," Journal of Empirical Finance, Elsevier, vol. 24(C), pages 94-107.
    7. Malenko, Nadya & Levit, Doron & Maug, Ernst, 2021. "The voting premium," CEPR Discussion Papers 15718, C.E.P.R. Discussion Papers.
    8. Berezinets, Irina & Ilina, Yulia & Muravyev, Alexander, 2011. "CEO and Board Characteristics as Determinants of Private Benefits of Control: Evidence from the Russian Stock Exchange," IZA Discussion Papers 6256, Institute of Labor Economics (IZA).
    9. Karin Niehoff, 2016. "Price Discovery in Voting and Non-Voting Stocks," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 17(3), pages 285-307, December.
    10. Li, Wei-Xuan & Chen, Clara Chia-Sheng & French, Joseph J., 2012. "The relationship between liquidity, corporate governance, and firm valuation: Evidence from Russia," Emerging Markets Review, Elsevier, vol. 13(4), pages 465-477.
    11. Berezinets Irina & Ilina Yulia & Muravyev Alexander, 2011. "Owners, Boards, Managers and the Private Benefits of Control: A Study of Dual Class Stock Firms in an Emerging Market," EERC Working Paper Series 11/12e, EERC Research Network, Russia and CIS.
    12. Caprio, Lorenzo & Croci, Ettore, 2008. "The determinants of the voting premium in Italy: The evidence from 1974 to 2003," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2433-2443, November.

    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. Renée Adams & Daniel Ferreira, 2008. "One Share-One Vote: The Empirical Evidence," Review of Finance, European Finance Association, vol. 12(1), pages 51-91.
    2. Bigelli, Marco & Croci, Ettore, 2013. "Dividend privileges and the value of voting rights: Evidence from Italy," Journal of Empirical Finance, Elsevier, vol. 24(C), pages 94-107.
    3. Dittmann, Ingolf, 2004. "Block Trading, Ownership Structure, and the Value of Corporate Votes," Papers 2004,13, Humboldt University of Berlin, Center for Applied Statistics and Economics (CASE).
    4. Mike Burkart & Samuel Lee, 2008. "One Share - One Vote: the Theory," Review of Finance, European Finance Association, vol. 12(1), pages 1-49.
    5. Berezinets Irina & Ilina Yulia & Muravyev Alexander, 2011. "Owners, Boards, Managers and the Private Benefits of Control: A Study of Dual Class Stock Firms in an Emerging Market," EERC Working Paper Series 11/12e, EERC Research Network, Russia and CIS.
    6. Berezinets, Irina & Ilina, Yulia & Muravyev, Alexander, 2011. "CEO and Board Characteristics as Determinants of Private Benefits of Control: Evidence from the Russian Stock Exchange," IZA Discussion Papers 6256, Institute of Labor Economics (IZA).
    7. Ehrhardt, Olaf & Nowak, Eric, 2001. "Private benefits and minority shareholder expropriation: Empirical evidence from IPOs of German family-owned firms," CFS Working Paper Series 2001/10, Center for Financial Studies (CFS).
    8. Tong, Wilson H.S. & Yu, Wayne W., 2012. "A corporate governance explanation of the A-B share discount in China," Journal of International Money and Finance, Elsevier, vol. 31(2), pages 125-147.
    9. Bigelli, Marco & Mehrotra, Vikas & Rau, P. Raghavendra, 2011. "Why are shareholders not paid to give up their voting privileges? Unique evidence from Italy," Journal of Corporate Finance, Elsevier, vol. 17(5), pages 1619-1635.
    10. Ling T. He & K. Michael Casey, 2011. "On The Pricing Of Dual Class Stocks: Evidence From Berkshire Hathaway," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 5(1), pages 103-112.
    11. Dimitrov, Valentin & Jain, Prem C., 2006. "Recapitalization of one class of common stock into dual-class: Growth and long-run stock returns," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 342-366, January.
    12. Goergen, Marc & Manjon, Miguel C. & Renneboog, Luc, 2008. "Recent developments in German corporate governance," International Review of Law and Economics, Elsevier, vol. 28(3), pages 175-193, September.
    13. Amoako-Adu, Ben & Smith, Brian F., 2001. "Dual class firms: Capitalization, ownership structure and recapitalization back into single class," Journal of Banking & Finance, Elsevier, vol. 25(6), pages 1083-1111, June.
    14. repec:dau:papers:123456789/5922 is not listed on IDEAS
    15. Yang, Ting & Lau, Sie Ting, 2005. "U.S. cross-listing and China's B-share discount," Journal of Multinational Financial Management, Elsevier, vol. 15(4-5), pages 334-353, October.
    16. Docherty, Paul & Easton, Steve & Pinder, Sean, 2021. "Flights-to-control: Time variation in the value of a vote," Journal of Corporate Finance, Elsevier, vol. 66(C).
    17. Bernard Yeung & Randall Morck & Daniel Wolfenzon, 2004. "Corporate Governance, Economic Entrenchment and Growth," Working Papers 04-21, New York University, Leonard N. Stern School of Business, Department of Economics.
    18. Pajuste, Anete, 2005. "Determinants and consequences of the unification of dual-class shares," Working Paper Series 465, European Central Bank.
    19. Caprio, Lorenzo & Croci, Ettore, 2008. "The determinants of the voting premium in Italy: The evidence from 1974 to 2003," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2433-2443, November.
    20. Braggion, Fabio & Giannetti, Mariassunta, 2019. "Changing corporate governance norms: Evidence from dual class shares in the UK," Journal of Financial Intermediation, Elsevier, vol. 37(C), pages 15-27.
    21. Choi, Hyang Mi & Yoon, Pyung-Sig & Lim, Byungkwon, 2023. "Corporate governance and price differences between dual-class shares in Korea," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 304-319.

    More about this item

    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:jbfina:v:31:y:2007:i:12:p:3621-3645. 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/jbf .

    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.