Abstract
I investigate what leads controlling families of publicly traded firms to sell their remaining ownership stake. The sale of a controlling stake is best explained in the context of theories of the firm related to optimal risk bearing, the separation of ownership and management expertise, the CEO succession process, and the monitoring provided by outside blockholders. A timing explanation is only marginally supported. The sale of a controlling stake is not explained by insufficient financial resources to fully invest in growth opportunities. This study offers insights into the final stage of the process in which entrepreneurs sequentially sell their firm to outside parties and also identifies the nature of costs of concentrated ownership. COPYRIGHT 2007, SCHOOL OF BUSINESS ADMINISTRATION, UNIVERSITY OF WASHINGTON.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 339-368 |
| Number of pages | 30 |
| Journal | Journal of Financial and Quantitative Analysis |
| Volume | 42 |
| Issue number | 2 |
| State | Published - Jun 2007 |
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ASJC Scopus subject areas
- Finance
- Accounting
- Economics and Econometrics
Cite this
Why do controlling families of public firms sell their remaining ownership stake? / Klasa, Sandy J.
In: Journal of Financial and Quantitative Analysis, Vol. 42, No. 2, 06.2007, p. 339-368.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Why do controlling families of public firms sell their remaining ownership stake?
AU - Klasa, Sandy J
PY - 2007/6
Y1 - 2007/6
N2 - I investigate what leads controlling families of publicly traded firms to sell their remaining ownership stake. The sale of a controlling stake is best explained in the context of theories of the firm related to optimal risk bearing, the separation of ownership and management expertise, the CEO succession process, and the monitoring provided by outside blockholders. A timing explanation is only marginally supported. The sale of a controlling stake is not explained by insufficient financial resources to fully invest in growth opportunities. This study offers insights into the final stage of the process in which entrepreneurs sequentially sell their firm to outside parties and also identifies the nature of costs of concentrated ownership. COPYRIGHT 2007, SCHOOL OF BUSINESS ADMINISTRATION, UNIVERSITY OF WASHINGTON.
AB - I investigate what leads controlling families of publicly traded firms to sell their remaining ownership stake. The sale of a controlling stake is best explained in the context of theories of the firm related to optimal risk bearing, the separation of ownership and management expertise, the CEO succession process, and the monitoring provided by outside blockholders. A timing explanation is only marginally supported. The sale of a controlling stake is not explained by insufficient financial resources to fully invest in growth opportunities. This study offers insights into the final stage of the process in which entrepreneurs sequentially sell their firm to outside parties and also identifies the nature of costs of concentrated ownership. COPYRIGHT 2007, SCHOOL OF BUSINESS ADMINISTRATION, UNIVERSITY OF WASHINGTON.
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UR - http://www.scopus.com/inward/citedby.url?scp=34250877858&partnerID=8YFLogxK
M3 - Article
VL - 42
SP - 339
EP - 368
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
SN - 0022-1090
IS - 2
ER -