Ownership Structure and Performance Among Entrepreneurial Firms: The Growth-Control Trade-Off
48 Pages Posted: 18 Mar 2015
Date Written: March 17, 2015
Roughly one-third of our sample firms show substantial ownership structure changes over time. Growth potential, risk sharing, and demand for external capital seem to be the main reasons behind dilutions of ownership structures, and these firms show strong growth in the following five years. After controlling for the unobserved firm fixed effects or the sample selection bias, we do not find any evidence suggesting a link between ownership structure and other dimensions of firm performance. Therefore, the trade-off between growth aspiration and retention of dominant control of the firms may be critical in ownership structure decisions among entrepreneurial firms.
Keywords: ownership-performance relation, change in ownership structure, propensity score matching, difference-in-difference regression
JEL Classification: G21, G32
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