IDEAS home Printed from https://ideas.repec.org/a/eme/jaarpp/jaar-02-2017-0027.html
   My bibliography  Save this article

The control-ownership wedge and the survival of French IPOs

Author

Listed:
  • Imen Derouiche
  • Syrine Sassi
  • Narjess Toumi

Abstract

Purpose - The purpose of this paper is to investigate the effect of the control-ownership wedge of controlling shareholders (excess control) on the survival of French initial public offerings (IPOs). Design/methodology/approach - This paper studies a large sample of 434 French IPOs. The empirical analysis uses the Cox proportional hazard and accelerated-failure-time models. Data are manually gathered from IPO prospectuses. Findings - The findings support a positive relation between the control-ownership wedge and IPO survival time, indicating that survival is more likely in firms with high excess control levels. This result is consistent with the view that controlling shareholders with a large control-ownership wedge have incentives to preserve their private benefits of control by increasing firm survival chances. The findings also show that older IPOs are more likely to survive, while riskier and underpriced IPOs are more likely to delist. Practical implications - The results provide a better understanding of the role of excess control in IPO survival. They also enrich the debate on the efficiency of the one-share-one-vote rule. Originality/value - The research provides new insights into the role of agency conflicts in IPO survivability. In particular, it explores the effect of dominant shareholders with a control-ownership wedge on survival time.

Suggested Citation

  • Imen Derouiche & Syrine Sassi & Narjess Toumi, 2018. "The control-ownership wedge and the survival of French IPOs," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 19(2), pages 271-294, May.
    • Handle: RePEc:eme:jaarpp:jaar-02-2017-0027
    DOI: 10.1108/JAAR-02-2017-0027
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JAAR-02-2017-0027/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JAAR-02-2017-0027/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JAAR-02-2017-0027?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sheela Sundarasen & Kamilah Kamaludin & Izani Ibrahim & Usha Rajagopalan & Nevi Danila, 2021. "Auditors, Underwriters, and Firm Owners’ Interaction in an IPO Environment: The Case of OECD Nations," Sustainability, MDPI, vol. 13(11), pages 1-13, June.
    2. Iftikhar Ahmad & Izlin Ismail & Shahrin Saaid Shaharuddin, 2021. "Predictive Role of Ex Ante Strategic Firm Characteristics for Sustainable Initial Public Offering (IPO) Survival," Sustainability, MDPI, vol. 13(14), pages 1-26, July.
    3. Muhammad Zubair Mumtaz & Zachary Alexander Smith, 2021. "Analyzing the duration of IPOs from offering to listing using the Cox proportional hazards model," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(1), pages 5-43, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jaarpp:jaar-02-2017-0027. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.