Abstract

This study examines the influence of institutional investor portfolio stability on the survival of 379 IPO firms
that went public in 1997. I find a negative relationship between the amount of stable institutional investment in
and newly public firms and post-IPO firm failure. Consistent with multiple agency theory I also find that outside
director board control weakens the influence of stable institutional investment on post-IPO firm failure. These
results provide support for multiple agency theory and highlight the importance of differences among and
between principals and agents in the post-IPO setting.

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