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Stock liquidity and second blockholder as drivers of corporate value: Evidence from Latin America

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  • Carlos Pombo

    ()

  • Rodrigo Taborda

    ()

Abstract

This paper examines the relationship between firm value and blockholders in Latin America. Econometric results for a comprehensive data set of more than 550 firms listed in the six largest stock markets of the region support a positive effect of variables measuring the existence, contestability, dispersion and identity of blockholder on performance (Tobin’s Q) only for highly liquid stocks. The identity of the second largest blockholder (family, foreign, financial or the State) emerges as critical for such effects. The study supports the voice and exit approach as a disciplinary mechanism on firm performance.

Suggested Citation

  • Carlos Pombo & Rodrigo Taborda, 2015. "Stock liquidity and second blockholder as drivers of corporate value: Evidence from Latin America," Documentos CEDE 014074, Universidad de los Andes - CEDE.
  • Handle: RePEc:col:000089:014074
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    File URL: http://economia.uniandes.edu.co/publicaciones/dcede2015-41.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Cristian Pinto-Gutiérrez & Carlos Pombo & Jairo Villamil-Díaz, 2018. "Board Capital Diversity and Firm Value: Evidence from Latin-America," Documentos CEDE 016972, Universidad de los Andes - CEDE.
    2. Alvarez, Roberto & Jara, Mauricio & Pombo, Carlos, 2018. "Do institutional blockholders influence corporate investment? Evidence from emerging markets," Journal of Corporate Finance, Elsevier, vol. 53(C), pages 38-64.
    3. repec:eee:reveco:v:56:y:2018:i:c:p:568-581 is not listed on IDEAS
    4. repec:eee:glofin:v:36:y:2018:i:c:p:23-40 is not listed on IDEAS
    5. French, Joseph J. & Taborda, Rodrigo, 2018. "Disentangling the relationship between liquidity and returns in Latin America," Global Finance Journal, Elsevier, vol. 36(C), pages 23-40.

    More about this item

    Keywords

    Blockholders; firm value; corporate governance;

    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

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