Journal Article

The Evolution of Corporate Ownership after IPO: The Impact of Investor Protection

C. Fritz Foley and Robin Greenwood

in The Review of Financial Studies

Published on behalf of The Society for Financial Studies

Volume 23, issue 3, pages 1231-1260
Published in print March 2010 | ISSN: 0893-9454
Published online September 2009 | e-ISSN: 1465-7368 | DOI: https://dx.doi.org/10.1093/rfs/hhp069
The Evolution of Corporate Ownership after IPO: The Impact of Investor Protection

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  • Corporate Governance
  • Law and Economics
  • Economic Growth and Aggregate Productivity

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Panel data on corporate ownership in thirty-four countries between 1995 and 2006 reveal that newly public firms have concentrated ownership regardless of the level of investor protection. After listing, firms in countries with strong investor protection are more likely to experience decreases in ownership concentration; these decreases occur in response to growth opportunities, and they are associated with new share issuance. We conclude that ownership concentration falls after listing in countries with strong investor protection, because firms in these countries continue to raise capital and grow, diluting blockholders as a consequence.

Keywords: G32; K22; O43

Journal Article.  13871 words.  Illustrated.

Subjects: Corporate Governance ; Law and Economics ; Economic Growth and Aggregate Productivity

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