Public trading and private incentives

• 成果类型: Article
• 署名作者: Faure-Grimaud, A; Gromb, D
• 署名单位: University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; University of London; London Business School
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhh002
• 发表日期: 2004
• 页码: 985
• 关键词: ownership structure; AGENCY COSTS; liquidity; INFORMATION; DECISION; securities; OFFERINGS; investor; equity; FIRMS

摘要

This article studies the link between public trading and the activity of a firm's large shareholder who can affect firm value. Public trading results in the formation of a stock price that is informative about the large shareholder's activity. This increases the latter's incentives to engage in value-increasing activities. Indeed, if he has to liquidate part of his stake before the effect of his activity is publicly observed, a more informative price rewards him for his activity. Implications are derived for the decision to go public, capital structure, and security design.