Public Ownership and the Local Economy

65 Pages Posted: 14 Sep 2017 Last revised: 30 Aug 2018

Jess Cornaggia

Pennsylvania State University - Department of Finance

Matthew Gustafson

Pennsylvania State University - Smeal College of Business

Jason D. Kotter

Brigham Young University - Department of Finance

Kevin Pisciotta

University of Kansas - School of Business

Date Written: August 27, 2018

Abstract

We find that a firm’s transition from private to public ownership stunts local economic growth, especially in poorer areas. After accounting for the endogenous decision to go public, areas hosting companies that go public experience muted growth in employment, establishments, population, and wages, relative to areas where firms file to go public and remain private. Establishment level analyses reveal that transitioning to public ownership causes firms to geographically diversify their establishments and employee base. These findings are consistent with public ownership reducing a firm’s reliance on local agglomeration economies, to the detriment of the local community.

Keywords: IPO, Economic Growth

JEL Classification: G38, J61, J21, G30, G32

Suggested Citation

Cornaggia, Jess and Gustafson, Matthew and Kotter, Jason D. and Pisciotta, Kevin, Public Ownership and the Local Economy (August 27, 2018). Available at SSRN: https://ssrn.com/abstract=3036176 or http://dx.doi.org/10.2139/ssrn.3036176

Jess Cornaggia (Contact Author)

Pennsylvania State University - Department of Finance ( email )

University Park, PA 16802
United States

HOME PAGE: http://jesscornaggia.com

Matthew Gustafson

Pennsylvania State University - Smeal College of Business ( email )

East Park Avenue
University Park, PA 16802
United States

Jason D. Kotter

Brigham Young University - Department of Finance ( email )

United States

Kevin Pisciotta

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
176
rank
158,449
Abstract Views
539
PlumX