The entrepreneur's choice between private and public ownership

• 成果类型: Article
• 署名作者: Boot, AWA; Gopalan, R; Thakor, AV
• 署名单位: University of Amsterdam; University of Michigan System; University of Michigan; Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2006.00855.x
• 发表日期: 2006
• 页码: 803-836
• 关键词: large shareholders; capital-markets; stock-market; AGENCY COSTS; corporate; liquidity; DECISION; INVESTMENT; CONTRACTS; companies

摘要

We analyze an entrepreneur/manager's choice between private and public ownership. The manager needs decision-making autonomy to optimally manage the firm and thus trades off an endogenized control preference against the higher cost of capital accompanying greater managerial autonomy. Investors need liquid ownership stakes. Public capital markets provide liquidity, but stipulate corporate governance that imposes generic exogenous controls, so the manager may not attain the desired trade-off between autonomy and the cost of capital. In contrast, private ownership provides the desired trade-off through precisely calibrated contracting, but creates illiquid ownership. Exploring this tension generates new predictions.