Public Listing Choice with Persistent Hidden Information

92 Pages Posted: 5 Jan 2021 Last revised: 25 Apr 2023

See all articles by Francesco Celentano

Francesco Celentano

University of Lausanne; Swiss Finance Institute

Mark Rempel

University of Toronto

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 cash flows. 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) cash flows exhibit 63% higher persistence than their tangible counterparts. Further, if firm intangibility levels returned to those of 1980, mean listing propensities would increase 5 percentage points while mean CEO variable pay growth would decrease by 61%.

Keywords: intangible capital, public listings, persistent private information, CEO compensation, private equity premium, 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). Swiss Finance Institute Research Paper No. 23-28, Available at SSRN: or

Francesco Celentano

University of Lausanne ( email )

Extranef 234
Lausanne, 1015

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Mark Rempel (Contact Author)

University of Toronto ( email )

150 St George Street
Toronto, Ontario M5S 2E9


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