Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • March 2010
  • Article
  • Review of Financial Studies

The Evolution of Corporate Ownership after IPO: The Impact of Investor Protection

By: C. Fritz Foley and Robin Greenwood
  • Format:Print
ShareBar

Abstract

We use firm-level data from 34 countries covering the 1995-2006 period to analyze how the characteristics of public markets shape the process by which firms become widely held. Firms in all countries in the sample tend to have concentrated ownership at the time they go public. Decreases in ownership concentration are more likely for firms in countries with stronger protections for minority shareholders, lower block premia, and more liquid stock markets. In these countries, firms are more likely to issue equity when investment opportunities are high, becoming widely held in the process. We find scant evidence, however, that changes in percentage blockholding forecast future returns, inconsistent with market timing theories. Our results suggest that liquidity-based theories of corporate ownership may have been underemphasized in previous cross-country studies.

Keywords

Blockholding; Float; Shareholder Rights; Investor Protection; Ownership; Financial Liquidity; Business History; Market Timing; Going Public; Business and Government Relations; Business and Shareholder Relations

Citation

Foley, C. Fritz, and Robin Greenwood. "The Evolution of Corporate Ownership after IPO: The Impact of Investor Protection." Review of Financial Studies 23, no. 3 (March 2010). (Formerly NBER Working Paper No. 14557.)
  • SSRN
  • Find it at Harvard
  • Read Now

About The Authors

C. Fritz Foley

Finance
→More Publications

Robin Greenwood

Finance
→More Publications

More from the Authors

    • June 2023
    • Faculty Research

    Rent Control in Boston, Again?

    By: Robin Greenwood, Richard S. Ruback, Robert Ialenti and Tom Quinn
    • May 2023
    • Faculty Research

    Natural Gas in New England

    By: Robin Greenwood, Richard S. Ruback and Gil Highet
    • February 2023
    • Faculty Research

    Success Academy Charter Schools

    By: Robin Greenwood, Joshua D. Coval, Denise Han, Ruth Page and Dave Habeeb
More from the Authors
  • Rent Control in Boston, Again? By: Robin Greenwood, Richard S. Ruback, Robert Ialenti and Tom Quinn
  • Natural Gas in New England By: Robin Greenwood, Richard S. Ruback and Gil Highet
  • Success Academy Charter Schools By: Robin Greenwood, Joshua D. Coval, Denise Han, Ruth Page and Dave Habeeb
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College