Ownership Structure and Initial Public Offerings

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...

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Bibliographic Details
Main Authors:	Aggarwal, Reena, Klapper, Leora
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING BANK LENDING BANK LOANS BANK RELATIONSHIPS BANKING RELATIONSHIPS BANKS BOOK VALUE CAPACITY BUILDING CAPITAL MARKETS COMMON EQUITY COMPANY CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATION CORPORATIONS DEBT DISCLOSURE DISCLOSURE REQUIREMENTS ECONOMIC DEMAND ECONOMICS EMERGING MARKETS EMPIRICAL ANALYSIS ENTREPRENEURS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL SECTOR FIRM SIZE FIRMS FIXED ASSETS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN SHAREHOLDERS GOING PUBLIC GROSS MARGIN GUIDELINES INFORMATION ASYMMETRY INITIAL PUBLIC OFFERINGS INSIDER CONTROL INSIDER TRADING INSURANCE INVESTOR PROTECTION IPO IPOS LARGE SHAREHOLDERS LENDERS LIQUIDITY MUTUAL FUNDS OWNERSHIP STRUCTURE POLITICAL ECONOMY PROFIT RATE PROFITABILITY PROPERTY RIGHTS RISK MANAGEMENT ROA SECURITIES SHAREHOLDERS SHAREHOLDING SHAREHOLDINGS SMALL FIRMS TAKEOVER UNDERWRITER REPUTATION UNDERWRITERS VENTURE CAPITAL INITIAL PUBLIC OFFERING CORPORATE STRUCTURE FINANCE LAW EQUITY STRUCTURE INSTITUTIONAL FRAMEWORK BANKING SYSTEMS VENTURE CAPITAL COMPANIES SALES MARGINS STOCK MARKETS SECURITIES PRICES STOCK OPTIONS FOREIGN INVESTMENTS VENTURE CAPITAL INITIAL PUBLIC OFFERING
Online Access:	http://documents.worldbank.org/curated/en/2003/07/2483261/ownership-structure-initial-public-offerings http://hdl.handle.net/10986/18150

Description
Summary:	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.

Ownership Structure and Initial Public Offerings

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