Price differences between equity classes. Corporate control,foreign ownership or liquidity? |
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Authors: | Bernt Arne
degaard |
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Institution: | aNorwegian School of Management BI, NO-0442 Oslo, Norway;bNorges Bank, Bankplassen 1, NO-0107 Oslo, Norway |
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Abstract: | This paper is the first comprehensive study of price differences for dual class equity at the Oslo Stock Exchange. It analyzes the relative importance of corporate control, foreign ownership restrictions and stock market liquidity for the price differences. The Norwegian market has the peculiar feature that in part of the sample period non-voting shares were trading at a premium to voting shares, i.e., what is usually termed the “voting premium” was negative. This result can be rationalized by restrictions on foreign ownership. In the later part of the period, with no regulatory restrictions on foreign ownership, the voting premium is positive, and related to corporate governance and liquidity. |
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Keywords: | Dual class equity Corporate governance Foreign ownership restrictions Stock market liquidity |
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