Ownership concentration among entrepreneurial firms: The growth-control trade-off

Document Type

Article

Publication Date

3-1-2022

Abstract

There is much variation in ownership concentration among entrepreneurial firms cross-sectionally and over time. Growth potential, risk-sharing, and demand for external capital seem to be the main reasons behind the choice of low ownership concentration, and firms with diluted ownership show strong growth. After controlling for the firm fixed effects or the sample selection bias, we do not find any evidence suggesting a link between ownership concentration and other dimensions of firm performance. Therefore, the trade-off between growth aspiration and retention of dominant control of the firms may be critical in ownership structure decisions among entrepreneurial firms.

Publication Title

International Review of Economics and Finance

First Page Number

122

Last Page Number

140

DOI

10.1016/j.iref.2021.11.005

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