Ownership structure and the life-cycle of the firm : a theory of the decision to go public

Maug, Ernst

DOI: https://doi.org/10.1023/A:1013804026442
URL: https://ssrn.com/abstract=305680
Additional URL: https://academic.oup.com/rof/article/5/3/167/15754...
Document Type: Article
Year of publication: 2001
The title of a journal, publication series: European Finance Review
Volume: 5
Issue number: 3
Page range: 167-200
Place of publication: Oxford
Publishing house: Oxford University Press
ISSN: 1382-6662
Publication language: English
Institution: Business School > ABWL u. Corporate Finance (Maug)
Subject: 330 Economics
Abstract: This paper presents a theory of initial public offerings based on the idea that the optimal ownership structure of a company changes over the life cycle of the firm. Insiders take the company public when they have lost the comparative advantage over outsiders in gathering information to evaluate the firm’s growth prospects. The size of the share sold to the public depends on the relative abilities of the market and insiders to gather this information and on the frictions in the going-public process. Intermediaries help to reduce these frictions and lead to a more efficient allocation if IPOs are conducted more frequently. Discrimination between different classes of investors may be beneficial. Learning by the market about projects in a new industry can lead to a clustering of new issues (hot issue markets).

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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