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Tracking Stocks

Author

Listed:
  • Sabine Langner

    (Albert-Ludwigs-Universität Freiburg)

Abstract

Summary Tracking stocks are common stock of the firm that track the success of a particular business unit without changing the conglomerate structure. Thus, they try to combine the advantages of an external financing via the market and an internal financing. However, the structure evokes governance problems. This paper examines the design of tracking stocks and the resulting advantages and disadvantages. It further surveys the existing empirical literature on tracking stocks. The analysis suggests that tracking stocks are an equity structure that may add value for specific types of firms.

Suggested Citation

  • Sabine Langner, 2004. "Tracking Stocks," Schmalenbach Journal of Business Research, Springer, vol. 56(7), pages 666-684, November.
    • Handle: RePEc:spr:sjobre:v:56:y:2004:i:7:d:10.1007_bf03372754
    DOI: 10.1007/BF03372754
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    References listed on IDEAS

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    More about this item

    Keywords

    G32;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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