How does ownership concentration exacerbate information asymmetry among equity investors? |
| |
Authors: | Hae-Young Byun Lee-Seok Hwang Woo-Jong Lee |
| |
Institution: | 1. College of Business Administration, Kangwon National University, Chuncheon, Gangwondo, Republic of Korea;2. Colleage of Business Administration, Seoul National University, Shillim-dong 56-1, Gwanak-gu, Republic of Korea;3. School of Accounting and Finance, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, China |
| |
Abstract: | This study investigates the association between ownership concentration and information asymmetry between informed and uninformed investors, and explores several mechanisms that mitigate such a relation. Using a large sample of Korean firms whose ownership structure is highly concentrated, we find that the degree of information asymmetry increases with ownership concentration. We also find that ownership concentration is positively associated with information asymmetry via an increase in the relative amount of informed trading. This effect more than overcomes the unexpected decrease in the frequency of private information events. Furthermore, while neither institutional investors nor internal corporate governance systems help alleviate the negative effects of ownership concentration, analyst following reduces the information asymmetry associated with ownership concentration. Our findings are robust to endogeneity concerns, additional control variables, and an alternative use of empirical proxies. |
| |
Keywords: | |
本文献已被 ScienceDirect 等数据库收录! |
|