This paper analyses some of the tradeoffs involved in the decision to go public. The main point is that entrepreneurs go public in order to fund larger projects, but lose discretion over decisions by becoming accountable to outside investors. The analysis focuses on succession and recruiting problems and assumes that the major source of private benefits of control is connected with investments in human capital. Firms' control structure influences their decision to search for new managers. This creates an externality between firms and equilibria can be Pareto ranked, such that the emergence of a superior control structure for all firms is inhibited by coordination failure.
Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.
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