By Bernt Arne Ødegaard, Norwegian School of Management BI and Norges Bank
Journal of Banking and Finance 31 (2007), 3621-3645.
This paper is the first comprehensive study of price differences for dual class equity at the Oslo Stock Exchange, and analyzes the relative importance of corporate control, foreign ownership restrictions and stock market liquidity for price differences. The Norwegian market has the peculiar feature that in part of the sample period nonvoting shares were trading at a premium to voting shares, i.e., what is usually termed the "voting premium" was negative. This result can be rationalized by restrictions on foreign ownership. In the later part of the period, with no regulatory restrictions on foreign ownership, the voting premium is positive. This is primarily influenced by corporate governance and liquidity.