Insider ownership, bid–ask spread, and stock splits: Evidence from the Stock Exchange of Thailand

Gorkittisunthorn, Maneeporn; Jumreornvong, Seksak; Limpaphayom, Piman

doi:10.1016/j.irfa.2005.09.004

Cited by 14 publications

(4 citation statements)

References 37 publications

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“…We include four types of independent variables. Firstly, we include some important determinants of the bid-ask spread drawn from the literature (Aitken and Frino, 1996;Aitken, et al, 2004;Glosten and Milgrom, 1985;Gorkittisunthorn et al, 2006;Stoll, 1978). Price is the natural logarithm of the closing price and it proxies for dealer's ordering cost.…”

Section: Methodsmentioning

confidence: 99%

The effect of data breach announcements beyond the stock price: Empirical evidence on market activity

Rosati

Cummins

Deeney

et al. 2017

International Review of Financial Analysis

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Extending the literature that has focused thus far on stock price impact, this study investigates the effect of data breach announcements on market activity, specifically through the response of the bid-ask spread and trading volume. We investigate data breach announcements as a potential source of asymmetric information and provide a new dimension to the ongoing debate on market efficiency. Adopting an event study methodology on a sample of 74 data breaches from 2005 to 2014, we find that data breach announcements have a positive short-term effect on both bid-ask spread and trading volume. The effect is only evidenced however on the day of the event, with market efficiency ensuring a quick return to normal market activity. No abnormal trading activity emerges before announcements, so there is no evidence in our study that these types of events are being exploited by informed market participants. The magnitude of event day effects is found to be more pronounced for large breaches, and when the breach involves lost devices.

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Section: Methodsmentioning

confidence: 99%

The effect of data breach announcements beyond the stock price: Empirical evidence on market activity

Rosati

Cummins

Deeney

et al. 2017

International Review of Financial Analysis

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“…When testing the effect of excessive leverage on firm valuation independently, Myers (1977), Nandelstadh and Rosenberg (2003), and Margaritis and Psillaki (2010) found that the effect of excessive leverage was negative, due to the threat of financial bankruptcy that the excessive leverage posed to the firm. For Malaysian firms in general, Driffield et al (2001) empirically showed, 5 Similar findings were made by Gorkittisunthorn, Jumreornvong and Limpaphayom (2006) when they examined the moderating effect of concentrated ownership on bidask spread changes during stock splits in Thailand. The authors noted that since concentrated ownership is commonly associated with pyramidal structure, Lins (2003), the reason behind such findings may be due to the he entrenchment motive of the ultimate owners.…”

Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 57%

Pyramidal structure, firm capital structure exploitation and ultimate owners' dominance

Bany‐Ariffin

Nor

McGowan

2010

International Review of Financial Analysis

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a b s t r a c tIn this paper we investigate how pyramid structure, separating cash flow rights and control rights, allows ultimate owners to control the company's resources for the creation of private benefits and to avoid punishment for such conduct. Empirical tests are conducted using three-stage least squares regression. The estimated results provide support for the hypotheses proposed that the separation of cash flow rights and control rights have led to the use of excess leverage among pyramidal companies to preserve ultimate owners' control. High levels of leverage, affect the firm's valuation negatively because of the potential for financial distress. Thus, our findings may provide one additional explanation for the severity of the decrease in corporate value among the pyramidal companies in Malaysia as pointed out in the studies of Claessens et al. (2002), Lins (2003, and Lemmon and Lins (2003). Secondly, the empirical evidence from this study provides insight into the forces that influence corporate valuation of firms in developed countries particularly those that have pyramidal structure.

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“…It is important to note that the literature on stock splits has primarily focused on developed countries; however, emerging markets have recently gained attention (Pandow and Ganai, 2023;Pandey et al, 2022;Gupta and Arya, 2020;Pandow and Butt, 2019;Bodhanwala, 2015;Charitou et al, 2005;Gorkittisunthorn et al, 2006). Surprisingly, the Brazilian stock market, one of the largest in Latin America (World Bank, 2021), has received relatively little academic attention (Vieira and Procianoy, 2003;Vieira and Becker, 2011;Antônio et al, 2018).…”

Section: Stock and Reverse Splitsmentioning

confidence: 99%

Stock splits and reverse splits in the Brazilian capital market

Almeida,

Pimenta Júnior,

Gaio

et al. 2024

JEFAS

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PurposeThis study aims to evaluate the presence of abnormal returns due to stock splits or reverse stock splits in the Brazilian capital market context.Design/methodology/approachThe event study technique was used on data from 518 events that occurred in a 30-year period (1987–2016), comprising 167 stock splits and 351 reverse stock splits.FindingsThe results revealed the occurrence of abnormal returns around the time the shares began trading stock splits or reverse stock splits at a statistical significance level of 5%. The main conclusion is that stock split and reverse stock split operations represent opportunities for extraordinary gains and may serve as a reference for investment strategies in the Brazilian stock market.Originality/valueThis study innovates by including reverse stock splits, as the existing literature focuses on stock splits, and by testing two distinct “zero” dates that of the ordinary general meeting that approved the share alteration and the “ex” date of the alteration, when the shares were effectively traded, reverse split or split.

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Insider ownership, bid–ask spread, and stock splits: Evidence from the Stock Exchange of Thailand

Cited by 14 publications

References 37 publications

The effect of data breach announcements beyond the stock price: Empirical evidence on market activity

The effect of data breach announcements beyond the stock price: Empirical evidence on market activity

Pyramidal structure, firm capital structure exploitation and ultimate owners' dominance

Stock splits and reverse splits in the Brazilian capital market

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