1932
0
  1. Home
  2. A-Z Publications
  3. Annual Review of Financial Economics
  4. Volume 14, 2022
  5. Article

Annual Review of Financial Economics

Volume 14, 2022

The Effects of Public and Private Equity Markets on Firm Behavior

Abstract

In this article, I review the theoretical and empirical literature on the effects of public and private equity markets on firm behavior, emphasizing the consequences that emerge from disclosure requirements, ownership concentration, and degree of firm standardization. While publicly listed firms benefit from a lower cost of capital, enabling increased focus on commercialization and profitability, they are less suited to pursue long-term risky investments. Privately held firms are better equipped to pursue innovative projects but face a higher cost of capital, which limits their growth. Complementarities between public and private equity markets can mitigate their respective limitations. Innovation in private equity markets supplements commercialization efforts of public firms, and demand for innovation by public firms accelerates entrepreneurial activity in private equity markets. I conclude by discussing directions for future research.

Keyword(s): commercialization, innovation, JEL G24, JEL G3, JEL G32, JEL O3, JEL O31, private equity, public equity markets, venture capital
Loading

Article metrics loading...

/content/journals/10.1146/annurev-financial-052021-072939
2022-11-01
2024-04-23
Loading full text...

Full text loading...

/deliver/fulltext/financial/14/1/annurev-financial-052021-072939.html?itemId=/content/journals/10.1146/annurev-financial-052021-072939&mimeType=html&fmt=ahah

Literature Cited

  1. Abdulla Y, Dang VA, Khurshed A. 2017. Stock market listing and the use of trade credit: evidence from public and private firms. J. Corp. Finance 46:391–410
     [Google Scholar]
  2. Acharya V, Xu Z. 2017. Financial dependence and innovation: the case of public versus private firms. J. Financ. Econ. 124:2223–43
     [Google Scholar]
  3. Aggarwal VA, Hsu DH. 2014. Entrepreneurial exits and innovation. Manag. Sci. 60:4867–87
     [Google Scholar]
  4. Aghion P, Tirole J. 1994. The management of innovation. Q. J. Econ. 109:41185–209
     [Google Scholar]
  5. Aghion P, Van Reenen J, Zingales L. 2013. Innovation and institutional ownership. Am. Econ. Rev. 103:1277–304
     [Google Scholar]
  6. Almeida H, Fos V, Kronlund M. 2016. The real effects of share repurchases. J. Financ. Econ. 119:1168–85
     [Google Scholar]
  7. Amihud Y, Lev B 1981. Risk reduction as a managerial motive for conglomerate mergers. Bell J. Econ. 12:2605–17
     [Google Scholar]
  8. Amihud Y, Lev B, Travlos NG 1990. Corporate control and the choice of investment financing: The case of corporate acquisitions. J. Finance 45:2603–16
     [Google Scholar]
  9. Asker J, Farre-Mensa J, Ljungqvist A. 2015. Corporate investment and stock market listing: A puzzle?. Rev. Financ. Stud. 28:2342–90
     [Google Scholar]
  10. Axelson U, Jenkinson T, Strömberg P, Weisbach MS. 2013. Borrow cheap, buy high? The determinants of leverage and pricing in buyouts. J. Finance 68:62223–67
     [Google Scholar]
  11. Babina T, Ouimet P, Zarutskie R. 2020. IPOs, human capital, and labor reallocation SSRN Work. Pap. 2692845
  12. Bai J, Bernstein S, Dev A, Lerner J. 2021. Public entrepreneurial finance around the globe. Tech. Rep., Nat. Bur. Econ. Res. Cambridge, MA:
  13. Baker M, Gompers PA. 2003. The determinants of board structure at the initial public offering. J. Law Econ. 46:2569–98
     [Google Scholar]
  14. Bauguess S, Gullapalli R, Ivanov V. 2018. Capital raising in the US: an analysis of the market for unregistered securities offerings, 2009–2017. White Pap., US Sec. Exch. Comm. Washington, DC:
  15. Bellon A. 2020. Does private equity ownership make firms cleaner? The role of environmental liability risks. Work. Pap., Wharton Bus. Sch., Univ. Pa. Philadelphia:
  16. Bena J, Li K. 2014. Corporate innovations and mergers and acquisitions. J. Finance 69:51923–60
     [Google Scholar]
  17. Bernstein S. 2015. Does going public affect innovation?. J. Finance 70:41365–403
     [Google Scholar]
  18. Bernstein S, Colonnelli E, Malacrino D, McQuade T. 2021. Who creates new firms when local opportunities arise?. J. Financ. Econ. 143:1107–30
     [Google Scholar]
  19. Bernstein S, Dev A, Lerner J. 2020. The creation and evolution of entrepreneurial public markets. J. Financ. Econ. 136:2307–29
     [Google Scholar]
  20. Bernstein S, Giroud X, Townsend RR. 2016. The impact of venture capital monitoring. J. Finance 71:41591–622
     [Google Scholar]
  21. Bernstein S, Korteweg A, Laws K. 2017. Attracting early-stage investors: evidence from a randomized field experiment. J. Finance 72:2509–38
     [Google Scholar]
  22. Bernstein S, Lerner J, Mezzanotti F. 2019. Private equity and financial fragility during the crisis. Rev. Financ. Stud. 32:41309–73
     [Google Scholar]
  23. Bernstein S, Lerner J, Sorensen M, Strömberg P. 2017. Private equity and industry performance. Manag. Sci. 63:41198–213
     [Google Scholar]
  24. Bernstein S, Mehta K, Townsend R, Xu T. 2020. Does venture capital attract human capital? Evidence from a randomized field experiment. Work. Pap., Harvard Bus. Sch. Cambridge, MA:
  25. Bernstein S, Sheen A. 2016. The operational consequences of private equity buyouts: evidence from the restaurant industry. Rev. Financ. Stud. 29:92387–418
     [Google Scholar]
  26. Bhattacharya S, Ritter JR. 1983. Innovation and communication: signalling with partial disclosure. Rev. Econ. Stud. 50:2331–46
     [Google Scholar]
  27. Bias D, Lochner B, Obernberger S, Sevilir M. 2021. Organizational and labor transformation during going public. Work. Pap., Swedish House Finance, Stockholm Sch. Econ. Stockholm:
  28. Bodnaruk A, Kandel E, Massa M, Simonov A. 2008. Shareholder diversification and the decision to go public. Rev. Financ. Stud. 21:62779–824
     [Google Scholar]
  29. Bolton P, Von Thadden EL. 1998. Blocks, liquidity, and corporate control. J. Finance 53:11–25
     [Google Scholar]
  30. Borisov A, Ellul A, Sevilir M. 2021. Access to public capital markets and employment growth. J. Financ. Econ. 141:3896–918
     [Google Scholar]
  31. Boucly Q, Sraer D, Thesmar D. 2011. Growth LBOs. J. Financ. Econ. 102:2432–53
     [Google Scholar]
  32. Brau JC, Fawcett SE. 2006. Initial public offerings: an analysis of theory and practice. J. Finance 61:1399–436
     [Google Scholar]
  33. Brav O. 2009. Access to capital, capital structure, and the funding of the firm. J. Finance 64:1263–308
     [Google Scholar]
  34. Brown JR, Fazzari SM, Petersen BC. 2009. Financing innovation and growth: cash flow, external equity, and the 1990s R&D boom. J. Finance 64:1151–85
     [Google Scholar]
  35. Busaba WY, Benveniste LM, Guo RJ. 2001. The option to withdraw IPOs during the premarket: empirical analysis. J. Financ. Econ. 60:173–102
     [Google Scholar]
  36. Caskurlu T. 2019. An IPO pitfall: patent lawsuits SSRN Work. Pap. 3479253
  37. Celikyurt U, Sevilir M, Shivdasani A. 2010. Going public to acquire? The acquisition motive in IPOs. J. Financ. Econ. 96:3345–63
     [Google Scholar]
  38. Chemmanur TJ, He S, Nandy DK. 2010. The going-public decision and the product market. Rev. Financ. Stud. 23:51855–908
     [Google Scholar]
  39. Chernenko S, Lerner J, Zeng Y. 2021. Mutual funds as venture capitalists? Evidence from unicorns. Rev. Financ. Stud. 34:52362–410
     [Google Scholar]
  40. Cohn JB, Nestoriak N, Wardlaw M. 2020. Private equity buyouts and workplace safety. SSRN Work. Pap. 2728704
  41. Cong LW, Howell ST. 2021. Policy uncertainty and innovation: evidence from initial public offering interventions in China. Manag. Sci. 67:116629–7289
     [Google Scholar]
  42. Cong LW, Howell ST, Zhang R. 2017. How public markets foster firm standardization: Evidence from Chinese IPOs. Work. Pap., Stern Sch. Bus., N.Y. Univ. New York:
  43. Cornaggia J, Gustafson M, Kotter JD, Pisciotta K. 2022. Initial public offerings and the local economy SSRN Work. Pap. 3036176
  44. Cunningham C, Ederer F, Ma S 2021. Killer acquisitions. J. Political Econ. 129:3649–702
     [Google Scholar]
  45. Davis SJ, Haltiwanger J, Handley K, Jarmin R, Lerner J, Miranda J. 2014. Private equity, jobs, and productivity. Am. Econ. Rev. 104:123956–90
     [Google Scholar]
  46. Davis SJ, Haltiwanger JC, Handley K, Lipsius B, Lerner J, Miranda J. 2019. The (heterogeneous) economic effects of private equity buyouts NBER Work. Pap. 26371
  47. Degeorge F, Zeckhauser R. 1993. The reverse LBO decision and firm performance: theory and evidence. J. Finance 48:41323–48
     [Google Scholar]
  48. Demirgüç-Kunt A, Levine R. 1996. Stock markets, corporate finance, and economic growth: an overview. World Bank Econ. Rev. 10:2223–39
     [Google Scholar]
  49. Diamond DW, Verrecchia RE. 1991. Disclosure, liquidity, and the cost of capital. J. Finance 46:41325–59
     [Google Scholar]
  50. Doidge C, Karolyi GA, Stulz RM. 2013. The US left behind? Financial globalization and the rise of IPOs outside the US. J. Financ. Econ. 110:3546–73
     [Google Scholar]
  51. Doidge C, Karolyi GA, Stulz RM. 2017. The US listing gap. J. Financ. Econ. 123:3464–87
     [Google Scholar]
  52. Dunbar CG, Foerster SR. 2008. Second time lucky? Withdrawn IPOs that return to the market. J. Financ. Econ. 87:3610–35
     [Google Scholar]
  53. Easley D, O'Hara M. 2004. Information and the cost of capital. J. Finance 59:41553–83
     [Google Scholar]
  54. Eaton C, Howell ST, Yannelis C. 2020. When investor incentives and consumer interests diverge: private equity in higher education. Rev. Financ. Stud. 33:94024–60
     [Google Scholar]
  55. Edelen RM, Kadlec GB. 2005. Issuer surplus and the partial adjustment of IPO prices to public information. J. Financ. Econ. 77:2347–73
     [Google Scholar]
  56. Edmans A. 2009. Blockholder trading, market efficiency, and managerial myopia. J. Finance 64:62481–513
     [Google Scholar]
  57. Ewens M, Farre-Mensa J. 2020. The deregulation of the private equity markets and the decline in IPOs. Rev. Financ. Stud. 33:125463–509
     [Google Scholar]
  58. Ewens M, Farre-Mensa J. 2021. Private or public equity? The evolving entrepreneurial finance landscape NBER Work. Pap. 29532
  59. Ewens M, Nanda R, Rhodes-Kropf M. 2018. Cost of experimentation and the evolution of venture capital. J. Financ. Econ. 128:3422–42
     [Google Scholar]
  60. Ewens M, Townsend RR. 2020. Are early stage investors biased against women?. J. Financ. Econ. 135:3653–77
     [Google Scholar]
  61. Falato A, Scharfstein D. 2016. The stock market and bank risk-taking NBER Work. Pap. 22689
  62. Ferreira D, Manso G, Silva AC. 2014. Incentives to innovate and the decision to go public or private. Rev. Financ. Stud. 27:1256–300
     [Google Scholar]
  63. Figueroa N, Serrano CJ. 2019. Patent trading flows of small and large firms. Res. Policy 48:71601–16
     [Google Scholar]
  64. Fracassi C, Previtero A, Sheen AW. 2020. Barbarians at the store? Private equity, products, and consumers NBER Work. Pap. 27435
  65. Frank MZ, Goyal VK 2008. Trade-off and pecking order theories of debt. Handbook of Empirical Corporate Finance, Vol. 2 BE Eckbo 135–202 Amsterdam: Elsevier
     [Google Scholar]
  66. Gahng M, Ritter JR, Zhang D. 2021. SPACs. SSRN Work. Pap. 3775847
  67. Gao H, Harford J, Li K. 2017. CEO turnover–performance sensitivity in private firms. J. Financ. Quant. Anal. 52:2583–611
     [Google Scholar]
  68. Gao H, Hsu PH, Li K. 2018. Innovation strategy of private firms. J. Financ. Quant. Anal. 53:11–32
     [Google Scholar]
  69. Gao X, Ritter JR, Zhu Z. 2013. Where have all the IPOs gone?. J. Financ. Quant. Anal. 48:61663–92
     [Google Scholar]
  70. Gilbert RJ, Greene H. 2014. Merging innovation into antitrust agency enforcement of the Clayton Act. George Washington Law Rev. 83:61919
     [Google Scholar]
  71. Gilje EP, Taillard JP. 2016. Do private firms invest differently than public firms? Taking cues from the natural gas industry. J. Finance 71:41733–78
     [Google Scholar]
  72. Gompers PA, Gornall W, Kaplan SN, Strebulaev IA. 2020. How do venture capitalists make decisions?. J. Financ. Econ. 135:1169–90
     [Google Scholar]
  73. Gompers PA, Kaplan SN, Mukharlyamov V. 2016. What do private equity firms say they do?. J. Financ. Econ. 121:3449–76
     [Google Scholar]
  74. Gompers PA, Kovner A, Lerner J, Scharfstein D. 2008. Venture capital investment cycles: the impact of public markets. J. Financ. Econ. 87:11–23
     [Google Scholar]
  75. Gompers PA, Lerner J. 2000. Money chasing deals? The impact of fund inflows on private equity valuations. J. Financ. Econ. 55:2281–325
     [Google Scholar]
  76. Gompers PA, Lerner J, Blair MM, Hellmann T. 1998. What drives venture capital fundraising?. Brookings Pap. Econ. Act. Microecon. 1998:149–204
     [Google Scholar]
  77. Gompers PA, Wang SQ. 2017. Diversity in innovation NBER Work. Pap. 23082
  78. Gornall W, Strebulaev IA. 2021. The economic impact of venture capital: evidence from public companies. Work. Pap. 3362, Stanford Grad. Sch. Bus. Stanford, CA:
  79. Goyal VK, Nova A, Zanetti L 2011. Capital market access and financing of private firms. Int. Rev. Finance 11:2155–79
     [Google Scholar]
  80. Graham JR, Harvey CR, Rajgopal S. 2005. The economic implications of corporate financial reporting. J. Account. Econ. 40:1–33–73
     [Google Scholar]
  81. Gupta A, Howell ST, Yannelis C, Gupta A. 2021. Does private equity investment in healthcare benefit patients? Evidence from nursing homes NBER Work. Pap. 28474
  82. Hall BH, Lerner J 2010. The financing of R&D and innovation. Handbook of the Economics of Innovation, Vol. 1 BH Hall, N Rosenberg 609–39 Amsterdam: Elsevier
     [Google Scholar]
  83. Hall RE, Woodward SE. 2010. The burden of the nondiversifiable risk of entrepreneurship. Am. Econ. Rev. 100:31163–94
     [Google Scholar]
  84. Heaton J, Lucas D. 2004. Capital structure, hurdle rates, and portfolio choice—interactions in an entrepreneurial firm. Work. Pap., Univ. Chicago
  85. Hellmann T, Puri M. 2002. Venture capital and the professionalization of start-up firms: empirical evidence. J. Finance 57:1169–97
     [Google Scholar]
  86. Hellmann T, Thiele V. 2015. Friends or foes? The interrelationship between angel and venture capital markets. J. Financ. Econ. 115:3639–53
     [Google Scholar]
  87. Hochberg YV. 2012. Venture capital and corporate governance in the newly public firm. Rev. Finance 16:2429–80
     [Google Scholar]
  88. Holmström B. 1999. Managerial incentive problems: a dynamic perspective. Rev. Econ. Stud. 66:1169–82
     [Google Scholar]
  89. Hotchkiss ES, Smith DC, Strömberg P. 2012. Private equity and the resolution of financial distress. Eur. Corp. Gov. Inst. Finance Ser. Work. Pap. 331/2012, Am. Finance Assoc. Meet. Chicago:
  90. Howell ST, Lerner J, Nanda R, Townsend RR. 2020. Financial distancing: How venture capital follows the economy down and curtails innovation NBER Work. Pap. 27150
  91. Hsu DH. 2004. What do entrepreneurs pay for venture capital affiliation?. J. Finance 59:41805–44
     [Google Scholar]
  92. Hughes JS, Liu J, Liu J. 2007. Information asymmetry, diversification, and cost of capital. Account. Rev. 82:3705–29
     [Google Scholar]
  93. Ivashina V, Kovner A. 2011. The private equity advantage: leveraged buyout firms and relationship banking. Rev. Financ. Stud. 24:72462–98
     [Google Scholar]
  94. Jain BA, Kini O. 1994. The post-issue operating performance of IPO firms. J. Finance 49:51699–726
     [Google Scholar]
  95. Jeng LA, Wells PC. 2000. The determinants of venture capital funding: evidence across countries. J. Corp. Finance 6:3241–89
     [Google Scholar]
  96. Jensen MC. 1989. Eclipse of the public corporation. Harvard Bus. Rev. 61:66–68
     [Google Scholar]
  97. Jensen MC, Meckling WH. 1976. Theory of the firm: managerial behavior, agency costs and ownership structure. J. Financ. Econ. 3:4305–60
     [Google Scholar]
  98. Johnston-Ross E, Ma S, Puri M 2021. Private equity and financial stability: evidence from failed bank resolution in the crisis NBER Work. Pap. 28751
  99. Kaplan S. 1989. Management buyouts: evidence on taxes as a source of value. J. Finance 44:3611–32
     [Google Scholar]
  100. Kaplan SN, Sensoy BA, Strömberg P. 2009. Should investors bet on the jockey or the horse? Evidence from the evolution of firms from early business plans to public companies. J. Finance 64:175–115
     [Google Scholar]
  101. Kaplan SN, Strömberg PE. 2004. Characteristics, contracts, and actions: evidence from venture capitalist analyses. J. Finance 59:52177–210
     [Google Scholar]
  102. Kerr WR, Lerner J, Schoar A. 2014. The consequences of entrepreneurial finance: evidence from angel financings. Rev. Financ. Stud. 27:120–55
     [Google Scholar]
  103. Kerr WR, Nanda R, Rhodes-Kropf M. 2014. Entrepreneurship as experimentation. J. Econ. Perspect. 28:325–48
     [Google Scholar]
  104. Kortum S, Lerner J. 2001. Does venture capital spur innovation?. Entrepreneurial Inputs and Outcomes: New Studies of Entrepreneurship in the United States, Vol. 13: Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, ed. GC Libecap 1–44 Bingley, UK: Emerald Group Pub. Ltd.
     [Google Scholar]
  105. Lambert R, Leuz C, Verrecchia RE. 2007. Accounting information, disclosure, and the cost of capital. J. Account. Res. 45:2385–420
     [Google Scholar]
  106. Larrain B, Phillips GM, Sertsios G, Urzúa I F. 2021. The effects of going public on firm performance and strategy: evidence from international IPOs SSRN Work. Pap. 3830690
  107. Lerner J. 1995. Venture capitalists and the oversight of private firms. J. Finance 50:1301–18
     [Google Scholar]
  108. Lerner J, Merges RP. 1998. The control of technology alliances: an empirical analysis of the biotechnology industry. J. Ind. Econ. 46:2125–56
     [Google Scholar]
  109. Lerner J, Nanda R. 2020. Venture capital's role in financing innovation: What we know and how much we still need to learn. J. Econ. Perspect. 34:3237–61
     [Google Scholar]
  110. Lerner J, Schoar A, Sokolinski S, Wilson K 2018. The globalization of angel investments: evidence across countries. J. Financ. Econ. 127:11–20
     [Google Scholar]
  111. Lerner J, Sorensen M, Strömberg P. 2011. Private equity and long-run investment: the case of innovation. J. Finance 66:2445–77
     [Google Scholar]
  112. Lichtenberg FR, Siegel D. 1990. The effects of leveraged buyouts on productivity and related aspects of firm behavior. J. Financ. Econ. 27:1165–94
     [Google Scholar]
  113. Lindsey LA, Stein LCD. 2019. Angels, entrepreneurship, and employment dynamics: evidence from investor accreditation rules Presented at the Sixth Annual Conference on Financial Market Regulation, US Sec. Exch. Comm. Washington, DC: May 10
  114. Lindsey LA, Stein LCD. 2020. Angels, entrepreneurship, and employment dynamics: evidence from investor accreditation rules SSRN Work. Pap. 2939994
  115. Lowry M, Michaely R, Volkova E. 2017. Initial public offerings: a synthesis of the literature and directions for future research. Foundations and Trends in Finance, Vol. 11, No. 3–4154–320 Boston: now Pub.
     [Google Scholar]
  116. Lowry M, Schwert GW. 2002. IPO market cycles: Bubbles or sequential learning?. J. Finance 57:31171–200
     [Google Scholar]
  117. Ma S. 2020. The life cycle of corporate venture capital. Rev. Financ. Stud. 33:1358–94
     [Google Scholar]
  118. Maksimovic V, Phillips G, Yang L 2013. Private and public merger waves. J. Finance 68:52177–217
     [Google Scholar]
  119. Maksimovic V, Phillips GM, Yang L 2020. Are public firms really myopic? Evidence from matching IPO firms at birth. Work. Pap., Univ. Md. College Park, Md:.
  120. Maksimovic V, Pichler P. 2001. Technological innovation and initial public offerings. Rev. Financ. Stud. 14:2459–94
     [Google Scholar]
  121. March JG. 1991. Exploration and exploitation in organizational learning. Organ. Sci. 2:171–87
     [Google Scholar]
  122. McKinsey & Co 2020. A new decade for private markets: McKinsey global private markets review 2020. Rep., McKinsey & Co. New York, NY: https://www.mckinsey.com/∼/media/mckinsey/industries/private%20equity%20and%20principal%20investors/our%20insights/mckinseys%20private%20markets%20annual%20review/2020/mckinsey-global-private-markets-review-2020-v4.pdf
  123. Mikkelson WH, Shah K. 1994. Performance of companies around initial public offerings SSRN Work. Pap. 5323
  124. Modigliani F, Miller MH. 1958. The cost of capital, corporation finance and the theory of investment. Am. Econ. Rev. 48:3261–97
     [Google Scholar]
  125. Mortal S, Reisel N. 2013. Capital allocation by public and private firms. J. Financ. Quant. Anal. 48:177–103
     [Google Scholar]
  126. Myers SC, Majluf NS. 1984. Corporate financing and investment decisions when firms have information that investors do not have. J. Financ. Econ. 13:2187–221
     [Google Scholar]
  127. Narayanan M. 1985. Managerial incentives for short-term results. J. Finance 40:51469–84
     [Google Scholar]
  128. Nat. Ventur. Cap. Assoc 2020. 2020 yearbook. Nat. Ventur. Cap. Assoc. Washington, DC: https://nvca.org/wp-content/uploads/2020/04/NVCA-2020-Yearbook.pdf
  129. Ouimet P, Zarutskie R. 2014. Who works for startups? The relation between firm age, employee age, and growth. J. Financ. Econ. 112:3386–407
     [Google Scholar]
  130. Pagano M, Panetta F, Zingales L. 1996. The stock market as a source of capital: some lessons from initial public offerings in Italy. Eur. Econ. Rev. 40:3–51057–69
     [Google Scholar]
  131. Pagano M, Panetta F, Zingales L. 1998. Why do companies go public? An empirical analysis. J. Finance 53:127–64
     [Google Scholar]
  132. Peters RH. 2018. Volatility and venture capital. Presented at the Asian Finance Association Annual Conference Tokyo: June 25
  133. Phillips GM, Sertsios G. 2017. Financing and new product decisions of private and publicly traded firms. Rev. Financ. Stud. 30:51744–89
     [Google Scholar]
  134. Phillips GM, Zhdanov A. 2013. R&D and the incentives from merger and acquisition activity. Rev. Financ. Stud. 26:134–78
     [Google Scholar]
  135. Phillips GM, Zhdanov A. 2017. Venture capital investments and merger and acquisition activity around the world NBER Work. Pap. 24082
  136. Plumer B, Barclay E, Belluz J, Irfan U. 2018. A simple guide to CRISPR, one of the biggest science stories of the decade. VOX Media, Dec. 27. https://www.vox.com/2018/7/23/17594864/crispr-cas9-gene-editing
    [Google Scholar]
  137. Porter ME. 1992. Capital disadvantage: America's failing capital investment system. Harvard Bus. Rev. 70:565–82
     [Google Scholar]
  138. Puri M, Zarutskie R. 2012. On the life cycle dynamics of venture-capital- and non-venture-capital-financed firms. J. Finance 67:62247–93
     [Google Scholar]
  139. Rajan RG. 2012. Presidential address: the corporation in finance. J. Finance 67:41173–217
     [Google Scholar]
  140. Rhodes-Kropf M, Robinson DT, Viswanathan S. 2005. Valuation waves and merger activity: the empirical evidence. J. Financ. Econ. 77:3561–603
     [Google Scholar]
  141. Ritter J. 2022. Special purpose acquisition company (SPAC) IPOs through 2021. Rep., Coll. Bus., Univ. Fla. Gainesville: https://site.warrington.ufl.edu/ritter/files/IPOs-SPACs.pdf
  142. Robinson DT. 2008. Strategic alliances and the boundaries of the firm. Rev. Financ. Stud. 21:2649–81
     [Google Scholar]
  143. Saunders A, Steffen S. 2011. The costs of being private: evidence from the loan market. Rev. Financ. Stud. 24:124091–122
     [Google Scholar]
  144. Sheen A. 2020. Do public and private firms behave differently? An examination of investment in the chemical industry. J. Financ. Quant. Anal. 55:82530–54
     [Google Scholar]
  145. Shleifer A, Summers LH. 1988. Breach of trust in hostile takeovers. Corporate Takeovers: Causes and Consequences, ed. AJ Auerbach 33–68 NBER Proj. Rep. Ser. Chicago: Univ. Chicago Press
     [Google Scholar]
  146. Shleifer A, Vishny RW. 1990. Equilibrium short horizons of investors and firms. Am. Econ. Rev. 80:2148–53
     [Google Scholar]
  147. Shleifer A, Vishny RW. 2003. Stock market driven acquisitions. J. Financ. Econ. 70:3295–311
     [Google Scholar]
  148. Sørensen M. 2007. How smart is smart money? A two-sided matching model of venture capital. J. Finance 62:62725–62
     [Google Scholar]
  149. Spaenjers C, Steiner E. 2021. The value of specialization in private equity: evidence from the hotel industry. Res. Pap. FIN-2020-1410, HEC Paris:
  150. Stein JC. 1989. Efficient capital markets, inefficient firms: a model of myopic corporate behavior. Q. J. Econ. 104:4655–69
     [Google Scholar]
  151. Stein JC. 2003. Agency, information and corporate investment. Handbook of the Economics of Finance, Vol. 1 Part A, ed. GM Constantinides, M Harris, RM Stulz 111–65 Amsterdam: Elsevier
     [Google Scholar]
  152. Stulz R. 1988. Managerial control of voting rights: financing policies and the market for corporate control. J. Financ. Econ. 20:25–54
     [Google Scholar]
  153. Tian X, Wang TY. 2014. Tolerance for failure and corporate innovation. Rev. Financ. Stud. 27:1211–55
     [Google Scholar]
  154. Tushman ML, O'Reilly CA III 1996. Ambidextrous organizations: managing evolutionary and revolutionary change. Calif. Manag. Rev. 38:48–29
     [Google Scholar]
  155. Von Thadden EL. 1995. Long-term contracts, short-term investment and monitoring. Rev. Econ. Stud. 62:4557–75
     [Google Scholar]
  156. Williamson OE. 2002. The theory of the firm as governance structure: from choice to contract. J. Econ. Perspect. 16:3171–95
     [Google Scholar]
  157. Wright P, Ferris SP, Sarin A, Awasthi V. 1996. Impact of corporate insider, blockholder, and institutional equity ownership on firm risk taking. Acad. Manag. J. 39:2441–58
     [Google Scholar]
  158. Zhao X. 2009. Technological innovation and acquisitions. Manag. Sci. 55:71170–83
     [Google Scholar]
/content/journals/10.1146/annurev-financial-052021-072939
Loading
The Effects of Public and Private Equity Markets on Firm Behavior
Annual Review of Financial Economics 14, 295 (2022); https://doi.org/10.1146/annurev-financial-052021-072939
/content/journals/10.1146/annurev-financial-052021-072939
/content/journals/10.1146/annurev-financial-052021-072939
Loading

Data & Media loading...

  • Article Type: Review Article

Most Cited Most Cited RSS feed

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error