| Summary: | 碩士 === 國立交通大學 === 財務金融研究所 === 104 === In the tide of Chinese company IPO in the US, a lot of companies’ IPO use the dual-class structure in the beginning of BAIDU, which helping the insiders grasping the absolute control firmly. This has become a phenomenon. This paper starts from observing the phenomenon, trying to put forward three factors that may leading the dual-class structure appearance in Chinese companies IPOs frequently. According to the three factors, we propose three hypotheses as follows:
The empirical result of first factor shows that the rationale ——the purpose of IPO is to raise fund for investing the long-term projects in the future, when the value of these projects is difficult or expensive to communicate to outside shareholders. So it’s necessary to retain founder’s control to ensure the realization of the investments——is acceptable. Under the second factor, no evidence shows that the reason of choosing dual-class structure is a founder has the desire for control and diversify the risk of his own wealth or investments at the same time. Under the third rationale, we first quantized the variable of “the founder’s influence”. The more close a founder’s personal image connected with the company——the more influence the founder has——the more possibility for the founder to hold the control.
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