The Trade-Off Between Liquidity and Control Revisited

• Antonio S. Mello ^[1] ; Rafael Repullo ^[2]
  1. [1] University of Wisconsin–Madison

     University of Wisconsin–Madison

     City of Madison, Estados Unidos

     
  2. [2] Centro de Estudios Monetarios y Financieros

     Centro de Estudios Monetarios y Financieros

     Madrid, España

     
• Localización: Documentos de Trabajo ( CEMFI ), Nº. 12 (Working Paper No. 9912, October 1999), 1999
• Idioma: inglés
• Enlaces
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• Resumen

  • This paper reexamines the analysis in Maug (1998) on the relationship between market liquidity and large shareholder activism. Taking explicitly into account the effect of a majority requirement for intervention in the management of a firm, we show that, contrary to Maug's claim, there is a range of parameter values for which increases in market liquidity decrease the probability of intervention.