The Role of Corporate Governance in Initial Public Offerings: Evidence from Real Estate Investment Trusts
AbstractThis study analyzes the impact of corporate governance structures at the initial public offering (IPO) date. We test hypotheses that firms with more shareholder-oriented governance structures receive higher valuations at the IPO stage and have better long-term performance. Our sample is a set of 107 IPOs of real estate investment trusts (REITs) between 1991 and 1998. Using a single industry and REITs in particular reduces potentially confounding effects due to differences in risk, transparency, and growth potential. We believe this-combined with our use of IPOs-mitigates the endogeneity problem present in studies of the impact of governance on seasoned firms' valuation. Our analysis indicates that firms with stronger governance structures have higher IPO valuations and better long-term operating performance than their peers. (c) 2008 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal The Journal of Law and Economics.
Volume (Year): 51 (2008)
Issue (Month): 3 (08)
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- Chinmoy Ghosh & Erasmo Giambona & John Harding & C. Sirmans, 2011. "How Entrenchment, Incentives and Governance Influence REIT Capital Structure," The Journal of Real Estate Finance and Economics, Springer, vol. 43(1), pages 39-72, July.
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- Zhilan Feng & Chinmoy Ghosh & Fan He & C. Sirmans, 2010. "Institutional Monitoring and REIT CEO Compensation," The Journal of Real Estate Finance and Economics, Springer, vol. 40(4), pages 446-479, May.
- Wen-Hsiu Chou & William Hardin & Matthew Hill & G. Kelly, 2013. "Dividends, Values and Agency Costs in REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 46(1), pages 91-114, January.
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