Corporate Governance, Illiquidity, and Valuation Issues in Privately-Owned Corporations

Chenchuramaiah T. Bathala, Oswald D. Bowlin and William P. Dukes
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Chenchuramaiah T. Bathala: Cleveland State University
Oswald D. Bowlin: Texas Tech University
William P. Dukes: Texas Tech University

Journal of Entrepreneurial Finance, 2003, vol. 8, issue 1, 1-30

Abstract: Investors in private corporations face unique problems relating to corporate control, illiquidity and valuation of securities. In this research, we survey a large sample of US corporations. Our sample includes both private and public firms. Major findings of our research are as follows: Private firms use written shareholder agreements for safeguarding ownership interests and dividend payments. Family owned firms dominate the ownership structure of private firms. Insiders of private firms own a much larger proportion of common stock than insiders in public firms, and the CEOs of private firms often happen to be the largest stockholders.

Keywords: Governance; Liquidity; Valuation; Private Firms (search for similar items in EconPapers)
JEL-codes: G14 G34 M13 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (1)

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