Abstract
Roughly one-third of our sample firms show substantial ownership structure changes over time. Growth potential, risk sharing, and demand for external capital seem to be the main reasons behind dilutions of ownership structures, and these firms show strong growth in the following five years. After controlling for the unobserved firm fixed effects or the sample selection bias, we do not find any evidence suggesting a link between ownership structure and other dimensions of firm performance. Therefore, the trade-off between growth aspiration and retention of dominant control of the firms may be critical in ownership structure decisions among entrepreneurial firms.
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