earticle

영어

We investigated how shareholders affect transaction costs in the case of United Kingdom firms. To accomplish this, we employed the FTSE 100 and the FTSE 250 indexes constituent firms traded on the SETS on the London Stock Exchange. From our database, we were able to discern eight types of shareholders (free floating shareholders, pension fund, foreign shareholders, government, investment company, other firms, employee shareholders, and the rest type of shareholders), investigating the length of stability in their ownership structure. Free floating shares did not change their holdings for 59 days and investment company shares did not change for 63 days, while all others did not change for over 170 days. We then examined how large of a change occurred when each type of shareholder changed their holdings. Pension fund shareholders changed their position in a small amount, compared to the other types of shareholders. We also examined the relationship between shareholder type and transaction costs. We found a negative relationship between free floating shares, the proxy variable of liquidity trading, and transaction costs. This negative relationship held after considering market capitalization and the other types of shareholders. We created the proxy variable for informed trading using the two-stage regression method. When we employed free floating shares as the proxy of liquidity trading and the predicted variable from the first-stage regression as the proxy of informed trading, we found a negative relationship between free floating shares and transaction costs and a positive relationship between the predicted variable and transaction costs. These relationships suggest that liquidity trading and informed trading impacts the transaction costs.