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Is greater trading liquidity good or bad for corporate governance? We address this question both theoretically and … information concerns her own plans for taking an active role in governance. We show that an increase in the liquidity of the firm … governance. Empirical tests using three distinct sources of exogenous variation in liquidity confirm the negative relation …
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Theories of delegated monitoring predict that when public disclosure is costly, monitoring by a large investor leads management to supply more private information to that investor, and less public disclosure to other similarly aligned investors who free-ride off the monitor. We test this...
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role in governance. We show that once a block has been created, its continued existence is jeopardized by an increase in … instead of intervening. Thus, blocks are inherently fragile and higher liquidity can be harmful for governance. Empirical …
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