Ownership Concentration and Firm Value: New Evidence from Owner Stakes in IPOs

• 成果类型: Article
• 署名作者: Larrain, Borja; Roosenboom, Peter; Sertsios, Giorgo; Urzua, Francisco
• 署名单位: Pontificia Universidad Catolica de Chile; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam; University of Wisconsin System; University of Wisconsin Milwaukee; City St Georges, University of London
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.01039
• 发表日期: 2024
• 页码: 4441-4464
• 关键词: ownership; Firm value; instrumental variables; ipos

摘要

We study the relationship between ownership concentration and firm value using hand-collected data on the stakes of owner-managers before and after initial public offerings (IPOs). We instrument for the reduction in stake using market returns shortly before IPOs. Short-run market returns are plausible instruments because owners engage in market timing by selling more when prior returns are high, but high short-run returns are unlikely to directly affect firm value years after the IPO. As predicted by agency theory, a large reduction in ownership concentration at the IPO is negatively related to valuation. Future asset growth is low when owners have low stakes.