Authors: Abe De Jong; Teye Marra; Henry Van Beusichem
Addresses: Department of Finance, Rotterdam School of Management, Erasmus University, Burg Oudlaan 52, 3062 PA Rotterdam, The Netherlands ' Department of Accounting, University of Groningen, Nettelbosje 2, 9747 AE Groningen, The Netherlands ' Department of Finance and Accounting, University of Twente, Drienerlolaan 5, 7522 NB Enschede, The Netherlands
Abstract: In this paper, the authors analyse the stock price effects of block transactions and the disclosure thereof for Dutch firms. The authors measure a significant positive price effect for block purchases directly around the transaction date, but not for block sales. The authors do not measure a significant price effect for the disclosures of block transactions. The authors find two opposing effects about the agency role of large shareholders. In particular, while the authors find that the market reacts positively to the entrance of a new block holder, the authors also measure a negative reaction to the purchase of large blocks.
Keywords: agency problems; block trades; blockholders; corporate governance; disclosure; event study; liquidity; The Netherlands; price impact; block transactions; block purchases; price effect; stock prices.
International Journal of Corporate Governance, 2016 Vol.7 No.1, pp.1 - 31
Received: 25 Jun 2015
Accepted: 21 Jan 2016
Published online: 27 Jul 2016 *