“Why Are Fewer Companies Going Public?”
- 10 June 2019
- •
- Stockholm School of Economics in Riga
*** Click here to read the event summary report ***
*** This Event was by invitation only ***
(Attendance was open to the participants of the Baltic Economic Conference.)
The Roundtable focused on the reasons and implications of fewer companies going public. The steep decline in initial public offerings in the U.S. has raised concerns about reduced opportunities for the general public to save for the future. The discussion revolved around the following questions: How to incentivize companies to go public and at the same time do not start the race to the bottom with respect to disclosure standards and compliance? Do boards escape short-term pressure from the market by going public with limited voting right shares? Are companies staying private longer? Do institutional investors encourage the long-term sustainability of their portfolio companies? Are index funds sufficiently motivated to provide responsible stewardship of assets with respect to corporate governance? Can index inclusion serve as a boost for stock market activity in such frontier stock markets as the Baltics?
Organisers
Marco Becht, Solvay Brussels School, ECGI and CEPR
Anete Pajuste, Stockholm School of Economics (Riga) and ECGI
Supported By
Information
Monday, 10 June 2019
Registration
Welcome and Opening Discussion
Speakers:
Session 1 : Eclipse of the Public Corporation or Eclipse of the Public Markets?
Speakers:
Discussant:
Session 1 : Eclipse of the Public Corporation or Eclipse of the Public Markets?
Background reading:
Doidge, Craig and Kahle, Kathleen M. and Karolyi, George Andrew and Stulz, Rene M., Eclipse of the Public Corporation or Eclipse of the Public Markets? (January 1, 2018). Rotman School of Management Working Paper No. 3100255; Charles A. Dice Center Working Paper No. 2018-1; Fisher College of Business Working Paper No. 2018-03-01; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 547/2018.
Speakers
Discussants
Conference Documents
Do U.S. Firms Have the Best Corporate Governance?A Cross-Country Examination of the Relation between Corporate Governance and Shareholder Wealth
We compare the governance of foreign firms to the governance of similar U.S. firms. Using an index of firm governance attributes, we find that, on...
Read more
Signaling Safety
Contrary to signaling models’ central predictions, changes in the level of cash flows do not empirically follow changes in dividends. We use the...
Read more
Limited managerial attention and corporate aging
As firms have more assets in place, more of management?s limited attention is focused on managing assets in place rather than developing new growth...
Read more
Why High Leverage is Optimal for Banks
Liquidity production is a central role of banks. When there is a market premium for the production of (socially valuable) liquid financial claims and no...
Read more
What is the Shareholder Wealth Impact of Target CEO Retention in Private Equity Deals?
There is a widespread belief among observers that a lower premium is paid when the target CEO is retained by the acquirer in a private equity deal because...
Read more
Public versus Private Equity
The last twenty years or so have seen a sharp decline in public equity. I present a framework that explains the forces that cause the listing propensity of...
Read morePanel discussion: Disclosure standards for ownership, ESG, and political contributions – opportunities and challenges
Panel discussion: Disclosure standards for ownership, ESG, and political contributions – opportunities and challenges
Panelists
Lunch
Session 2 : Do Index Funds Monitor?
Speakers:
Discussant:
Session 2 : Do Index Funds Monitor?
Background reading:
Heath, Davidson and Macciocchi, Daniele and Michaely, Roni and Ringgenberg, Matthew C., Do Index Funds Monitor? (December 28, 2018). Available at SSRN: https://ssrn.com/abstract=3259433 or http://dx.doi.org/10.2139/ssrn.3259433
Speakers
Discussants
Conference Documents
Does Board Overlap Promote Coordination Between Firms?
We investigate how board overlap affects coordination and performance among public firms. Our identification exploits the staggered introduction of...
Read more
Voting Rationales
We examine why institutional investors vote the way they vote on director elections, using a novel dataset on voting rationales provided by...
Read more
Sticking around Too Long? Dynamics of the Benefits of Dual-Class Voting
Using a new dataset of corporate voting-rights from 1971 to 2015, we find that young dual-class firms trade at a premium and operate at least as...
Read more
Signaling Safety
Contrary to signaling models’ central predictions, changes in the level of cash flows do not empirically follow changes in dividends. We use the...
Read more
Do Index Funds Monitor?
Passively managed index funds now hold over 30% of U.S. equity fund assets; this shift raises fundamental questions about monitoring and governance. We...
Read more
Does Socially Responsible Investing Change Firm Behavior?
Using micro-level data, we examine the behavior of socially responsible investment (SRI) funds. SRI funds select firms with lower pollution, more...
Read more
Mutual funds’ strategic voting on environmental and social issues
Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholder's interests they advertise and maximizing...
Read more
Climate Change and Mutual Fund Voting on Environmental Proposals
This paper explores whether investors’ personal experience of climate change affects their voting behavior on environmental issues. We find that...
Read moreCoffee Break
Session 3 : Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers
Speakers:
Discussant:
Session 3 : Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers
Background reading:
Lauterbach, Beni and Mugerman, Yevgeny, Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers (September 1, 2018). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 576/2018.
Speakers
Discussants
Conference Documents
Illiquid Owners and Firm Behavior: Financial and Real Effects of the Personal Wealth Tax on Private Firms
We examine how negative liquidity shocks to households propagate to the firms they own. Our main tool for identification is a tax-driven shock to the...
Read more
Is it Worthwhile to Augment the Legal Protection of Public Debt Placed by Privately Held Companies?
We examine the effects of a law amendment in Israel in 2011 that imposes a set of minimum corporate governance standards on privately held firms that issue...
Read more
Shareholder Conflicts and Dividends
We examine how dividend policy is used to mitigate potential conflicts of interest between majority and minority shareholders in private Norwegian...
Read more
The Choice Between Various Freeze-out Procedures and its Consequences
We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a...
Read more
Dividends and Taxes: The Moderating Role of Agency Conflicts
We find that potential conflicts between majority and minority shareholders strongly influence how dividends respond to taxes. When the controlling...
Read more
The Family Behind the Family Firm Premium: Agency Conflicts and Personal Financial Constraints
We relate the personal characteristics of the controlling family to the difference between the return on assets of all Norwegian family firms and...
Read more
The Life-Cycle of Dual Class Firm Valuation
We examine U.S. dual and single class firms in 1980-2019 and document their valuation differences over their corporate life cycle. At the IPO, dual class...
Read moreCoffee Break
Session 4 : Multi-Class Shares Around the World: The Role of Institutional Investors
Speakers:
Discussant:
Session 4 : Multi-Class Shares Around the World: The Role of Institutional Investors
Background reading:
Jinhee Kim, Pedro Matos, Ting Xu- Multi-Class Shares Around the World: The Role of Institutional Investors (November 2018)
Speakers
Discussants
The Choice Between Various Freeze-out Procedures and its Consequences
We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a...
Read more
Benchmarking of Pay Components in CEO Compensation Design
We document an important element of CEO compensation design – benchmarking of the pay components. Analyzing a panel of CEO compensation data...
Read more
Generalists versus Specialists: Lifetime Work Experience and CEO Pay
We show that pay is higher for CEOs with general managerial skills gathered during lifetime work experience. We use CEOs’ résumés of S&P 1,500...
Read more
Leviathan Inc. and Corporate Environmental Engagement
In a 2010 special report, The Economist magazine termed the resurgence of state-owned, publicly listed enterprises “Leviathan Inc.” and...
Read more
Is it Worthwhile to Augment the Legal Protection of Public Debt Placed by Privately Held Companies?
We examine the effects of a law amendment in Israel in 2011 that imposes a set of minimum corporate governance standards on privately held firms that issue...
Read moreGeneral Discussion, Conclusion and Summing Up
Speakers:
Speakers
Presentations
Welcome and Opening Discussion
Welcome and Opening Discussion
Speakers
Loyalty Shares with Tenure Voting - Does the Default Rule Matter? Evidence from the Loi Florange Experiment
The contractual theory of the firm predicts that companies adopt charters that maximise firm value, regardless of the default rule. We test this...
Read more
Boardroom Racial Diversity: Evidence from the Black Lives Matter Protests
This paper provides evidence that the Black Lives Matter (BLM) protests that followed the killing of George Floyd on May 25, 2020 brought long-lasting...
Read more
Corporate Governance and Control
Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of...
Read more
Voice Through Divestment
A common argument against divestment is that it discards voting power and has a small effect on stock prices. We argue that divestment is a statement of...
Read more
Corporate Response to the War in Ukraine: Stakeholder Governance or Stakeholder Pressure?
This Article empirically investigates the corporate response to the Russian invasion of Ukraine in the framework of the stakeholder capitalism...
Read more
Returns to Hedge Fund Activism: An International Study
This paper provides evidence on the incidence, characteristics, and performance of activist engagements across countries. We find that the incidence...
Read moreSession 1 : Eclipse of the Public Corporation or Eclipse of the Public Markets?
Session 1 : Eclipse of the Public Corporation or Eclipse of the Public Markets?
Background reading:
Doidge, Craig and Kahle, Kathleen M. and Karolyi, George Andrew and Stulz, Rene M., Eclipse of the Public Corporation or Eclipse of the Public Markets? (January 1, 2018). Rotman School of Management Working Paper No. 3100255; Charles A. Dice Center Working Paper No. 2018-1; Fisher College of Business Working Paper No. 2018-03-01; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 547/2018.
Speakers
Discussants
Conference Documents
Why High Leverage is Optimal for Banks
Liquidity production is a central role of banks. When there is a market premium for the production of (socially valuable) liquid financial claims and no...
Read more
Mutual funds’ strategic voting on environmental and social issues
Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholder's interests they advertise and maximizing...
Read more
Do independent director departures predict future bad events?
Following surprise independent director departures, affected firms have worse stock and operating performance, are more likely to restate...
Read more
Why Do Bank Boards Have Risk Committees?
We develop a theory of bank board risk committees that explains why such committees can be valuable to shareholders even when they do not reduce bank risk....
Read more
The U.S. Listing Gap
The U.S. had 14% fewer exchange-listed firms in 2012 than in 1975. Relative to other countries, the U.S. now has abnormally few listed firms given its...
Read more
Private Benefits of Control, Ownership, and the Cross-Listing Decision
This paper investigates how a foreign firm's decision to cross-list on a U.S. stock exchange is related to the consumption of private benefits of control...
Read moreSession 2 : Do Index Funds Monitor?
Session 2 : Do Index Funds Monitor?
Background reading:
Heath, Davidson and Macciocchi, Daniele and Michaely, Roni and Ringgenberg, Matthew C., Do Index Funds Monitor? (December 28, 2018). Available at SSRN: https://ssrn.com/abstract=3259433 or http://dx.doi.org/10.2139/ssrn.3259433
Speakers
Discussants
Conference Documents
Does Socially Responsible Investing Change Firm Behavior?
Using micro-level data, we examine the behavior of socially responsible investment (SRI) funds. SRI funds select firms with lower pollution, more...
Read more
Does Board Overlap Promote Coordination Between Firms?
We investigate how board overlap affects coordination and performance among public firms. Our identification exploits the staggered introduction of...
Read more
Voting Rationales
We examine why institutional investors vote the way they vote on director elections, using a novel dataset on voting rationales provided by...
Read more
Sticking around Too Long? Dynamics of the Benefits of Dual-Class Voting
Using a new dataset of corporate voting-rights from 1971 to 2015, we find that young dual-class firms trade at a premium and operate at least as...
Read more
Do Index Funds Monitor?
Passively managed index funds now hold over 30% of U.S. equity fund assets; this shift raises fundamental questions about monitoring and governance. We...
Read more
Signaling Safety
Contrary to signaling models’ central predictions, changes in the level of cash flows do not empirically follow changes in dividends. We use the...
Read more
Mutual funds’ strategic voting on environmental and social issues
Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholder's interests they advertise and maximizing...
Read more
Climate Change and Mutual Fund Voting on Environmental Proposals
This paper explores whether investors’ personal experience of climate change affects their voting behavior on environmental issues. We find that...
Read moreSession 3 : Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers
Session 3 : Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers
Background reading:
Lauterbach, Beni and Mugerman, Yevgeny, Institutional Investors' Impact on the Terms and Outcome of Freeze-Out Tender Offers (September 1, 2018). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 576/2018.
Speakers
Discussants
Conference Documents
The Effect of Institutional Investors' Voice on the Terms and Outcome of Freeze-out Tender Offers
We study the impact of institutional investors' “voice” on 201 going private tender offers by controlling shareholders ("freeze-out" offers) in...
Read more
The Choice Between Various Freeze-out Procedures and its Consequences
We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a...
Read more
Benchmarking of Pay Components in CEO Compensation Design
We document an important element of CEO compensation design – benchmarking of the pay components. Analyzing a panel of CEO compensation data...
Read more
Shareholder Conflicts and Dividends
We examine how dividend policy is used to mitigate potential conflicts of interest between majority and minority shareholders in private Norwegian...
Read more
The Life-Cycle of Dual Class Firm Valuation
We examine U.S. dual and single class firms in 1980-2019 and document their valuation differences over their corporate life cycle. At the IPO, dual class...
Read more
Illiquid Owners and Firm Behavior: Financial and Real Effects of the Personal Wealth Tax on Private Firms
We examine how negative liquidity shocks to households propagate to the firms they own. Our main tool for identification is a tax-driven shock to the...
Read more
Is it Worthwhile to Augment the Legal Protection of Public Debt Placed by Privately Held Companies?
We examine the effects of a law amendment in Israel in 2011 that imposes a set of minimum corporate governance standards on privately held firms that issue...
Read moreSession 4 : Multi-Class Shares Around the World: The Role of Institutional Investors
Session 4 : Multi-Class Shares Around the World: The Role of Institutional Investors
Background reading:
Jinhee Kim, Pedro Matos, Ting Xu- Multi-Class Shares Around the World: The Role of Institutional Investors (November 2018)
Speakers
Discussants
Does Governance Travel around the World? Evidence from Institutional Investors
We examine whether institutional investors affect corporate governance by analyzing portfolio holdings of institutions in companies from 23...
Read more
Do Responsible Investors Invest Responsibly?
We study whether institutional investors that sign the Principles for Responsible Investment (PRI), a commitment to responsible investing, exhibit...
Read more
The Choice Between Various Freeze-out Procedures and its Consequences
We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a...
Read more
The Effect of Institutional Investors' Voice on the Terms and Outcome of Freeze-out Tender Offers
We study the impact of institutional investors' “voice” on 201 going private tender offers by controlling shareholders ("freeze-out" offers) in...
Read more
The Life-Cycle of Dual Class Firm Valuation
We examine U.S. dual and single class firms in 1980-2019 and document their valuation differences over their corporate life cycle. At the IPO, dual class...
Read more
Is it Worthwhile to Augment the Legal Protection of Public Debt Placed by Privately Held Companies?
We examine the effects of a law amendment in Israel in 2011 that imposes a set of minimum corporate governance standards on privately held firms that issue...
Read moreGeneral Discussion, Conclusion and Summing Up
General Discussion, Conclusion and Summing Up
Speakers
Corporate Governance and Control
Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of...
Read more
Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes U.K. Focus Fund
This article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager...
Read more
Outsourcing Active Ownership in Japan
This paper examines active ownership in Japan by an equity ownership service, Governance for Owners Japan (GOJ). GOJ engages with...
Read more
Boardroom Racial Diversity: Evidence from the Black Lives Matter Protests
This paper provides evidence that the Black Lives Matter (BLM) protests that followed the killing of George Floyd on May 25, 2020 brought long-lasting...
Read more
Corporate Governance Through Voice and Exit
How do active managers engage with portfolio firms? And, what role does monitoring and engagement play in their trading decisions? We use proprietary...
Read more
Does Mandatory Shareholder Voting Prevent Bad Acquisitions?
Shareholder voting on corporate acquisitions is controversial. In most countries acquisition decisions are delegated to boards and shareholder...
Read more
Loyalty Shares with Tenure Voting - Does the Default Rule Matter? Evidence from the Loi Florange Experiment
The contractual theory of the firm predicts that companies adopt charters that maximise firm value, regardless of the default rule. We test this...
Read morePanel Discussions
Panel discussion: Disclosure standards for ownership, ESG, and political contributions – opportunities and challenges
Panel discussion: Disclosure standards for ownership, ESG, and political contributions – opportunities and challenges
Panelists
Event Gallery
