Ownership Dispersion and Liquidity: Evidence from Thailand
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Abstract
This paper examines the relationship between ownership dispersion and stock liquidity of Thai listed companies over the period 2011-2015. The results indicate narrower bid-ask spreads, lower Amihud’s illiquidity ratio, and higher liquidity ratio when firms have higher free float or larger number of shareholders. Thus, the findings reveal that ownership dispersion has a positive effect on liquidity. The same results are obtained when the data is estimated by the Two-Stage Least Squares (2SLS) to control endogeneity problem. The findings have important implications for policymakers and managers to enhance stock liquidity through increased ownership dispersion.
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