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

Author

Listed:
  • Chenchuramaiah T. Bathala

    (Cleveland State University)

  • Oswald D. Bowlin

    (Texas Tech University)

  • William P. Dukes

    (Texas Tech University)

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.

Suggested Citation

  • Chenchuramaiah T. Bathala & Oswald D. Bowlin & William P. Dukes, 2003. "Corporate Governance, Illiquidity, and Valuation Issues in Privately-Owned Corporations," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 8(1), pages 1-30, Spring.
    • Handle: RePEc:pep:journl:v:8:y:2003:i:1:p:1-30
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    References listed on IDEAS

    as
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    Cited by:

    1. Chenchuramaiah T. Bathala & Oswald D. Bowlin & William P. Dukes, 2004. "Sources of Capital and Debt Structure in Small Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 9(1), pages 29-50, Spring.

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    More about this item

    Keywords

    Governance; Liquidity; Valuation; Private Firms;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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