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Ownership structure and initial public offerings

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  • Aggarwal, Reena
  • Klapper, Leora

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.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3103.

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Date of creation: 31 Jul 2003
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Handle: RePEc:wbk:wbrwps:3103

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Keywords: Economic Theory&Research; International Terrorism&Counterterrorism; Small Scale Enterprise; Financial Intermediation; Payment Systems&Infrastructure; International Terrorism&Counterterrorism; Economic Theory&Research; Financial Intermediation; Financial Crisis Management&Restructuring; Microfinance;

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Citations

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Cited by:
  1. Luca Benzoni & Carola Schenone, 2007. "Conflict of interest and certification in the U.S. IPO market," Working Paper Series, Federal Reserve Bank of Chicago WP-07-09, Federal Reserve Bank of Chicago.
  2. Benzoni, Luca & Schenone, Carola, 2010. "Conflict of interest and certification in the U.S. IPO market," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 19(2), pages 235-254, April.
  3. Ayyagari, Meghana, 2004. "Does cross-listing lead to functional convergence? Empirical evidence," Policy Research Working Paper Series 3264, The World Bank.

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