Performance benefits of tight control

Andrej Gill and Nikolai Visnjic

No 24, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This study investigates the transition from being a listed company with a dispersed ownership structure to being a privately held company with a concentrated ownership structure. We consider a sample of private equity backed portfolio companies to evaluate the consequences of the corporate governance changes on operational performance. Our analysis shows significant positive abnormal growth in several performance ratios for the private period of our sample companies relative to comparable public companies. These performance differences come from the increase in ownership concentration after the leveraged buyout transaction.

Keywords: private equity; leveraged buyouts; active shareholders; ownership concentration; corporate governance (search for similar items in EconPapers)
JEL-codes: G23 G24 G32 G34 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:24

DOI: 10.2139/ssrn.2281230

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