Luc Renneboog and Cara Vansteenkiste
The public corporation is often believed to have important advantages over its private counterpart. A stock market listing enables firms to raise funds in public capital markets, increases the share liquidity for investors, allows founders and entrepreneurs to diversify their wealth, and enables the use of options in remuneration packages. Also, the higher degree of visibility and media exposure of public firms can be an effective tool in the marketing of the company. On a personal level, founders and managers of public corporations generally enjoy more prestige. However, a public company with dispersed ownership may suffer from too high a degree of managerial ...