Performance Benefits of Tight Control
31 Pages Posted: 22 Oct 2010 Last revised: 15 Mar 2011
Date Written: February 15, 2011
This paper sheds light on the choice between being a listed company and having a dispersed ownership structure rather than being privately held and having a concentrated ownership structure. In order to investigate this decision we consider reverse leveraged buyouts and analyze relative operational performance during their private period. We see significant positive abnormal growth rates in several performance ratios within our sample of private companies. Our analysis suggests that performance differences stem from efficiency gains (focus on core business and cost reduction).
Keywords: LBO, RLBO, IPO, Private Equity, Corporate Control, Restructuring
JEL Classification: 10, 14, 23, 30, 32, 34
Suggested Citation: Suggested Citation