Market Liquidity, Investor Participation, and Managerial Autonomy: Why Do Firms Go Private?
Arnoud Boot,
Radhakrishnan Gopalan and
Anjan Thakor ()
Journal of Finance, 2008, vol. 63, issue 4, 2013-2059
Abstract:
We focus on public‐market investor participation to analyze the firm's decision to stay public or go private. The liquidity of public ownership is both a blessing and a curse: It lowers the cost of capital, but also introduces volatility in a firm's shareholder base, exposing management to uncertainty regarding shareholder intervention in management decisions, thereby affecting the manager's perceived decision‐making autonomy and curtailing managerial inputs. We extract predictions about how investor participation affects stock price level and volatility and the public firm's incentives to go private, providing a link between investor participation and firm participation in public markets.
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (30)
Downloads: (external link)
https://doi.org/10.1111/j.1540-6261.2008.01380.x
Related works:
Working Paper: Market Liquidity, Investor Participation and Managerial Autonomy: Why Do Firms Go Private? (2006) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:63:y:2008:i:4:p:2013-2059
Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp
Access Statistics for this article
More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().