Corporate governance, incentives, and industry consolidations

• 成果类型: Article
• 署名作者: Brown, KC; Dittmar, A; Servaes, H
• 署名单位: University of Michigan System; University of Michigan; University of London; London Business School
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhh009
• 发表日期: 2005
• 页码: 241
• 关键词: OPERATING PERFORMANCE; large shareholders; OFFERINGS; takeovers; returns

摘要

This article studies the determinants of the success of industry consolidations using a unique sample of firms established at the time of their initial public offering: roll-up IPOs. In these transactions, small, private firms merge into a shell company, which goes public at the same time. These firms deliver poor stock returns; their operating performance mimics that of comparable firms but does not justify their high initial valuations. However, if the managers and owners of the firms included in the transaction remain involved in the business as shareholders and directors, operating and stock price performance improve, and future acquisitions are better received by the market. Higher ownership by the sponsor of the transaction leads to a reduction in performance, consistent with the view that the sponsor's compensation is excessive. These findings highlight the impact of corporate governance on performance.