Impact of Managerial Ownership on Operational Performance of IPO Firms: French Context

Abstract

The study investigates the change in performance of French public firms post to their Initial Public Offerings (IPOs) and its relationship with the changes in the managerial ownership around the time firms do their IPOs. Tests are conducted on a sample of 65 French companies placed on the stock market over the period 2000-2006. The majority of our results show there is a significant negative relation between post-IPO change in performance and equity retention by the managerial ownership. Indeed, several results are opposed to the predictions resulting from the assumption of agency but contribute to retain the assumption of the timing.

Keywords: Initial Public Offering (IPO), Managerial Ownership, post - IPO Performance, timing

JEL Classification: G32