Changes in Ownership Structure and the Value of the Firm: The Case for Mutual-to-Stock Converting Thrift Institutions
Posted: 3 Aug 1999
Date Written: September 1994
This study examines some economic and organizational changes which result from the conversion of Mutual Thrift Institutions to publicly traded stock charter corporations. We focus on the relation between the initial value of the converted firm and subscription decisions by management and by regular depositors, and the employment of a prestigious underwriter or auditor.Whereas the proportion of managerial subscriptions displays a convex relationship with the firm's initial value, the relation between the regular depositor subscription and the converted firm's value is linear and positive. The status of the underwriter or auditor is unrelated to the value of the converted firm. These findings are attributed to the particular regulatory setting that governs the MTI conversion process, to constraints on ownership holdings and to the oversight function of the regulator.
JEL Classification: G21, G28
Suggested Citation: Suggested Citation