search query: @author Maug, E. / total: 5
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| Author: | Maug, E. |
| Title: | Large shareholders as monitors: Is there a trade-off between liquidity and control? |
| Journal: | Journal of Finance
1998 : FEB, VOL. 53:1, p. 65-129 |
| Index terms: | SHAREHOLDERS STOCK MARKETS COMPANY CONTROL |
| Language: | eng |
| Abstract: | The paper analyzes the incentives of large shareholders to monitor public corporations. The hypothesis is that a liquid stock market reduces large shareholders' incentives to monitor because it allows them to sell their stocks more easily. A liquid market also makes it less costly to hold larger stakes and easier to purchase additional shares. This fact is important if monitoring is costly; market liquidity mitigates the problem that small shareholders free ride on the effort of the large shareholder. Liquid stock markets are beneficial because they make corporate covernance more effective. |
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