Abstract
We examine the operating performance of Thai firms after they go public. Overall, we find that
their performance declines. We then explore the relationship between managerial ownership and the
change in firm performance. We find that firms with ‘low’ and ‘high’ levels of managerial ownership
experience positive relationships between managerial ownership and the change in performance
(alignment-of-interest hypothesis), while firms with ‘intermediate’ levels of managerial ownership
exhibit a negative relationship between managerial ownership and the change in performance
(entrenchment hypothesis). Examining the operating performance of IPO firms from an emerging
market and finding a curvilinear relationship between managerial ownership and the post-IPO
change in performance represents two significant contributions to the IPO literature.
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