The Trade-Off Between Liquidity and Control Revisited.

This paper reexamines the analysis in Maug (1998) on the relationship between market liquidity and large shareholder activism. Taking explicitly into account the effect of a majority requirement for intervention in the management of a firm, we show that, contrary to Maug's claim, there is a range of parameter values for which increases in market liquidity decrease the probability of intervention.

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Year of publication:	1999
Authors:	Mello, A.S. ; Repullo, R.
Institutions:	Centro de Estudios Monetarios y Financieros (CEMFI)
Subject:	SHAREHOLDERS \| BUSINESS ORGANIZATION \| OWNERSHIP

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Series:	Centro de Estudios Monetarios Y Financieros-.
Type of publication:	Book / Working Paper
Notes:	12 pages
Classification:	G30 - Corporate Finance and Governance. General ; G32 - Financing Policy; Capital and Ownership Structure ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005776174