Chemmanur, Thomas J.; Jiao, Yawen - In: Journal of Banking & Finance 36 (2012) 1, pp. 305-319
We consider an incumbent who wishes to sell equity to outsiders at an IPO to implement his firm’s project. He may be talented (lower cost of effort, comparative advantage in project-implementation) or untalented. The project may have high (intrinsically more valuable, but showing less signs of...