Public Listing Choice with Persistent Hidden Information

75 Pages Posted: 5 Jan 2021

See all articles by Francesco Celentano

Francesco Celentano

University of Lausanne

Mark Rempel

University of Wisconsin-Madison

Date Written: November 12, 2020


How much does firm intangibility amplify CEOs' persistent private information and reduce firms' public listing propensity? We develop a model of competing public and private investors financing firms heterogeneously exposed to persistent private cashflows. Equilibrium financing is driven by information rent differentials in CEO compensation. We validate and structurally estimate the model using firm listing and CEO compensation data. We find private (intangible) cashflows exhibit 63% higher persistence than their tangible counterparts. Further, if firm intangibility levels returned to those of 1980, mean listing propensities would increase 8 percentage points while mean CEO variable pay growth would decrease by 43%.

Keywords: intangible capital, CEO compensation, private equity, dynamic optimal contracts, assignment model, structural estimation

JEL Classification: C78, D86, E22, G32, M12, O33

Suggested Citation

Celentano, Francesco and Rempel, Mark, Public Listing Choice with Persistent Hidden Information (November 12, 2020). Available at SSRN: or

Francesco Celentano

University of Lausanne ( email )

Extranef 234
Lausanne, 1015

Mark Rempel (Contact Author)

University of Wisconsin-Madison ( email )

1180 Observatory Drive
Madison, WI 53706
United States

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