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BID‐ASK SPREAD AND OWNERSHIP STRUCTURE
Author(s) -
Kini Omesh,
Mian Shehzad
Publication year - 1995
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1995.tb00574.x
Subject(s) - bid–ask spread , ask price , business , insider , relation (database) , insider trading , tender offer , bid price , monetary economics , financial economics , economics , accounting , econometrics , corporate governance , finance , market liquidity , database , shareholder , computer science , law , political science
In this paper we examine the relation between bid‐ask spread and ownership structure variables based on 1985 data for 1,063 NYSE firms. We document a nonpositive relation between bid‐ask spread and insider ownership and conclude that spread is unrelated to insider trading. We also find a robust significantly negative relation between spread and institutional ownership. Finally, we find a positive but generally insignificant relation between spread and blockholdings. Overall, our evidence does not support the predictions of asymmetric information models in markets with anonymous trading.