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This research investigates the effects of highly concentrated ownership structures on the liquidity of stock markets in a context of weak protection for minority shareholders. Two alternative hypotheses are tested. The shareholder expropriation hypothesis predicts an inverse relationship between liquidity and ownership concentration for the dominant shareholder. The dominant monitor-insider hypothesis contends that dominant shareholders promote liquidity in order to reduce their costs of exit and/or to improve the information transfer of their value enhancing activities to markets. Our empirical results are more consistent with the latter. A few alternative governance mechanisms also have liquidity enhancing effects, including cross-listing in the U.S. market and the threat of outside takeovers, which serve as monitoring devices to reduce informational asymmetries