Do Publicly Traded Firms Price Differently From Private Firms?
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Universidad Torcuato Di Tella
Abstract
This paper analyzes whether publicly traded firms price differently from privately held firms in the product markets. The main contribution is to present empirical evidence on the effect of ownership structure on pricing. The model shows that public firm shareholders optimally demand short-run returns to reduce agency costs. This stock-market pressure forces public firms to charge higher prices than private firms do. The evidence shows that in the US newspaper industry public firms charge higher advertising rates than private firms. The effects are statistically and economically significant. In addition, public firm prices are decreasing in insiders' ownership participation. To our knowledge, there are no previous studies comparing pricing by private and public companies.
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Medios de comunicación de masas, Periódicos, Empresa privada, Private enterprise, Empresa pública, Public enterprise, Estrategia comercial, Commercial strategy, Precios, Prices