A Study of Intragroup Block-Trading Incentives on the Tehran Stock Exchange

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Behrad, Amin | 2020

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 53439 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Heidari, Mehdi; Ebrahimnejad, Ali
Abstract:
Using the data of the Tehran Stock Exchange, we analyze the characteristics and explanatory factors of major intra-group and out-of-group transactions and test the tunneling hypothesis in intra-group transactions. We find that out-of-group transactions can be largely explained by changes in control or management, firm size, and the type of the firm. However, intra-group transaction properties mostly depend on the difference between the parent company's cash flow rights in the buyer and seller companies. Also, in the final analysis, we conclude that many intra-group transactions are made to change the structure of the business groups, especially when investment companies buy shares of listed companies from their parent company (Holding). In all cases, we see that as the size of the trading company increases, the transaction premium decreases significantly. Also, the effect of liquidity for transactions on the Tehran Stock Exchange has been negligible
Keywords:
Business Group ; Intragroup-Trade ; Premium Rate ; Tunneling ; Tehran Stock Exchange ; Block Trading ; Restructuring

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