Control dilution of an initial owner post-IPO: the impact of characteristics of ownership structure

Rihab Kriaa () and Taher Hamza ()
Additional contact information
Rihab Kriaa: University of Sousse
Taher Hamza: University of Carthage

SN Business & Economics, 2021, vol. 1, issue 3, 1-35

Abstract: Abstract In this paper, we investigate the impact of ownership structure’s characteristics on the probability of initial controlling shareholder’s (ICS) control dilution from a firm’s listing year to the five-year post-initial public offering (post-IPO) in the French context. We test in particular the effect of private benefits of control and family ownership and control concentration on control dilution. Using a sample of 165 French IPO firms over the period 1999–2010, we provide evidence that: (i) The probability of ICS’s control dilution decreases with high private benefits of control. (ii) A family ICS is less likely to experience control dilution than a non-family one. (iii) The probability of control dilution increases when the firm has a concentrated ownership. Therefore, agency problems and diversification are strong motivations for control dilution post-IPO. Our findings are robust even after using alternative control level and after running logit regression.

Keywords: Family firm; Initial public offering; Initial controlling shareholder; Control dilution; Private benefits of control (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-021-00052-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:spr:snbeco:v:1:y:2021:i:3:d:10.1007_s43546-021-00052-x

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-021-00052-x

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().