Ownership structure and initial public offerings

Reena Aggarwal and Leora Klapper

No 3103, Policy Research Working Paper Series from The World Bank

Abstract: The authors study the relationship between ownership structure, corporate governance, and the initial public offering (IPO) process. They examine equity ownership by different institutions, such as foreign and domestic financial institutions, banks with and without lending relationships, venture capitalists, and corporations prior to an IPO. The authors also analyze the relationship between ownership structure and corporate governance. They use a unique dataset of 152 Indian IPOs during the period 1999-2001 to analyze ownership of shares by main groups of shareholders. The authors find a relationship between ownership structure and firm-specific factors such as sales, leverage, and profitability, and IPO characteristics such as percentage of equity locked up, gross proceeds, and exchange of listing. There is also a strong relationship between ownership by different types of institutions. Ownership is also tied to bank lending relationships. Finally, the authors find strong relationships between ownership types and corporate governance. For example, firms with foreign investors are more likely to have an outside chief executive officer and offer an employee stock option plan.

Keywords: Multinational & Corporate Governance; Corporate Governance; Legal Institutions of the Market Economy; Capital Markets and Capital Flows; Non Bank Financial Institutions; Capital Flows; International Trade and Trade Rules; Mutual Funds; Civic Participation and Corporate Governance; Financial Sector Policy (search for similar items in EconPapers)
Date: 2003-07-31
New Economics Papers: this item is included in nep-acc and nep-fin
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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