Journal of Northeastern University(Social Science) ›› 2017, Vol. 19 ›› Issue (5): 459-467.DOI: 10.15936/j.cnki.1008-3758.2017.05.004

• Economics and Management • Previous Articles     Next Articles

Determinants of the Number of Blockholders: Tradeoff Between Governance Effects and Stock Liquidity——An Empirical Research Based on China's A-Share Corporations

WU Shi-fei, LIU Shu-lian   

  1. (School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, China)
  • Received:2016-11-29 Revised:2016-11-29 Online:2017-09-25 Published:2017-09-20
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Abstract: Based on China's A-share corporate data from 2010 to 2014, the determinants of the number of blockholders are investigated empirically with the ordered Logit model.The results indicate that the number of blockholders is an outcome of the tradeoff between the governance effects in voice and trading mechanisms implemented by blockholders. Specifically, the number is lower in the presence of individual blockholders and higher when managers' pay level increases.From the perspective of financial market microstructure, it is shown that the number of blockholders rises with stock liquidity. Furthermore, a higher level of stock liquidity strikes a more optimal balance between the productivity of blockholders and managers' effort. Besides, the number of blockholders is affected by the nature of corporate property rights, and the state-owned enterprises always have fewer blockholders.

Key words: number of blockholders, voice mechanism, trading mechanism, governance effect, stock liquidity

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