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Performance benefits of tight control

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  • Gill, Andrej
  • Visnjic, Nikolai

Abstract

This study investigates the transition from being a listed company with a dispersed ownership structure to being a privately held company with a concentrated ownership structure. We consider a sample of private equity backed portfolio companies to evaluate the consequences of the corporate governance changes on operational performance. Our analysis shows significant positive abnormal growth in several performance ratios for the private period of our sample companies relative to comparable public companies. These performance differences come from the increase in ownership concentration after the leveraged buyout transaction.

Suggested Citation

  • Gill, Andrej & Visnjic, Nikolai, 2013. "Performance benefits of tight control," SAFE Working Paper Series 24, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:24
    DOI: 10.2139/ssrn.2281230
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    References listed on IDEAS

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    More about this item

    Keywords

    private equity; leveraged buyouts; active shareholders; ownership concentration; corporate governance;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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