Link Between the Concentration of Capital and Liquidity: A Review of Literature and Technical Tools

Abstract

Market liquidity, corporate governance and their impact on the market value of firms are usually studied separately. However liquidity, with its operational and informational characteristics, has as much influence on shareholder value, especially as it interferes with other corporate governance mechanisms, even constituting the cost of market monitoring. In this working paper, we present the models linking ownership structure, controlling shareholders and liquidity. The presentation of these theoretical and integration tools creates the framework of global corporate governance that should be validated by empirical evidence.

Keywords: Liquidity, Corporate Governance, Ownership Structure, Voting Premium, Stock Markets, Shareholder Value