Why Do Firms Become Widely Held? An Analysis of the Dynamics of Corporate Ownership
Jean Helwege,
Christo Pirinsky and
René Stulz
Journal of Finance, 2007, vol. 62, issue 3, 995-1028
Abstract:
We examine the evolution of insider ownership of IPO firms from 1970 to 2001 to understand how U.S. firms become widely held. A majority of these firms has insider ownership below 20% after 10 years. Stock market performance and liquidity play an extremely important role in ownership dynamics. Firms with stocks that are highly valued, are liquid, and have performed well experience large decreases in insider ownership and become widely held. Ownership also falls for low cash flow and high capital expenditures firms. Surprisingly, variables proxying for agency costs have limited success in explaining the evolution of insider ownership.
Date: 2007
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https://doi.org/10.1111/j.1540-6261.2007.01229.x
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Working Paper: Why Do Firms Become Widely Held? An Analysis of the Dynamics of Corporate Ownership (2005) 
Working Paper: Why Do Firms Become Widely Held? An Analysis of the ynamics of Corporate Ownership (2005) 
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:62:y:2007:i:3:p:995-1028
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