Security Choice and Corporate Governance

نویسندگان

  • John S. Howe
  • Brett C. Olsen
  • Paul Brockman
  • Doug Cook
  • Steve Ferris
  • Andy Puckett
  • Chris Wikle
چکیده

The most efficient corporate governance structure will vary by firm depending on the costs and benefits of different governance mechanisms. For IPO firms that must select the type of equity offering, Schultz (1993) contends that warrants in equity offerings reduce agency conflicts. We conjecture that IPO firms issue warrants as a substitute for a less effective corporate governance structure, similar to the dividends-as-substitutes argument of Officer (2006). We examine a sample of unit IPO firms (firms issuing warrants with shares) matched to a comparable set of shares-only firms and show that warrants act as a substitute for other governance mechanisms.

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تاریخ انتشار 2008