Work

Blocks, Liquidity, and Corporate Control

Year: 1998

Type: article

Abstract: The paper develops a simple model of corporate ownership structure in which costs and benefits of ownership concentration are analyzed. The model compares the liquidity benefits obtained through dispersed corporate ownership with the benefits from efficient management control achieved by some degree of ownership concentration. The paper reexamines the free‐rider problem in corporate control in the presence of liquidity trading, derives predictions for the trade and pricing of blocks, and provides criteria for the optimal choice of ownership structure.

Source: The Journal of Finance

DOI: 10.1111/0022-1082.15240

Authors: Patrick Bolton, Ernst‐Ludwig Von Thadden

Institutions: Université Libre de Bruxelles, Tilburg University, University of Lausanne

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2017752325

FWCI: 100

Cites: 48

Cited by: 764

Related to: 10