Long term performance of internally controlled restricted voting firms
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The existence of restricted shares has significant implication for a potential divergence of interest between external equity providers and "insiders", and the deeper the divergence, the greater the potential for underperformance. Application of this agency theory to "singles" suggests a lower performance compared to "matched" diversely-held firms. Based on a sample of 90 internally-controlled restricted voting firms with their corresponding "matched" firms identified using propensity scores, this study provides partial empirical support to theoretical implications. Between 1985 and 1994, Treynor's performance index of 0.012 and 0.011 for "singles" and "matched" firms respectively, confirms no significant statistical difference in long term stock market performance. Accounting-based analysis is also consistent with stock market performance, however, when the sample of Initial Public Offerings is analysed separately, "matched" firms actually outperform "singles".
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This work is available on request. You can request a copy at https://library.carleton.ca/forms/request-pdf-copy-thesis
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Copyright © 1996 the author(s). Theses may be used for non-commercial research, educational, or related academic purposes only. Such uses include personal study, research, scholarship, and teaching. Theses may only be shared by linking to Carleton University Institutional Repository and no part may be used without proper attribution to the author. No part may be used for commercial purposes directly or indirectly via a for-profit platform; no adaptation or derivative works are permitted without consent from the copyright owner.
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- 1996
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