ASYMMETRIC INFORMATION AND MONITORING BEHAVIOUR IN BLOCK TRADES: AN EMPIRICAL ANALYSIS FOR SPAIN

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Abstract

The aim of our study is to analyse if the purchase of share blocks in the Spanish capital market is due to any of the two factors that have justified block transactions in financial literature: monitoring or information advantage. Our results show that the control group, institutional investors and insiders have a higher probability to buy a block when an increase in value creation is expected due to the higher monitoring of managers carried out by these investors. A higher probability of purchase, only by insiders, is also observed when there is more asymmetric information and therefore the acquirers can benefit from their position of better informed investors.

Keywords: Partial Control Market, Corporate Governance, Asymmetric Information

How to cite this paper: Díaz Díaz, B., & García-Olalla, M. (2004). Asymmetric information and monitoring behaviour in block trades: An empirical analysis for Spain. Corporate Ownership & Control, 2(1), 25-37. https://doi.org/10.22495/cocv2i1p2