Ultimate ownership structure and stock liquidity: empirical evidence from Tunisia

Purpose – The purpose of this paper is to study the ownership-liquidity relation in the context of the Tunisian Stock Exchange. Design/methodology/approach – In particular, the paper examines two empirical relationships: the relationship between ownership concentration and stock liquidity and the relationship between the separation of ownership from control and market liquidity. Findings – The empirical findings verify that the structure of ownership remains concentrated in the majority of the Tunisian firms. It is found that stock liquidity decreases significantly with concentrated ownership. Different devices are used to gain control and hence a significant separation of ownership from control affects liquidity in different ways. The results indicate that pyramidal structures have a significant negative impact on liquidity for all controlled firms. However, for family firms, non-voting shares increase liquidity for minority shareholders by reducing the probability of informed trading. Originality/value – Overall, this study reports that non-voting shares may be a liquidity enhancing device for family firms.