Companies moving from the Main market of London Stock Exchange to the AIM impair their information environment when entering the AIM; the information environment is measured by the stock’s liquidity and volatility. The primary empirical finding is that movement from the Main Market to the AIM decreases the liquidity and volatility of stocks. After controlling for the effects of factors that are known to affect stock liquidity and for the change in company characteristics after the movement date in the multivariate analysis, it is found that moving to the AIM is associated with a significant increase in Amihud illiquidity and the bid–ask spread and with a decrease in stock return volatility. The documented effects of movement to the AIM are found to be sustained over a long period of time following the movement event. This therefore implies that moving from the Main Market to the AIM is not improving the companies’ liquidity and volatility.

This paper investigates the impact of non-managerial and managerial blockholders on the value of the firms listed in the Alternative Investment Market (AIM). This study mainly investigates whether the effect of blockholders on firm value is due to the AIM high ownership concentration and low investor protection. The primary empirical finding, using GMM, justifies that non-managerial and managerial blockholders in the AIM affect the firm value in different ways. Non-managerial blockholders in the AIM improve the firm value by monitoring managers when their block sizes are up to 32 per cent. However, when their block sizes exceed 32 per cent, the blockholders expropriate other shareholders.