Going Private Transactions and Product Market Competition


This article investigates the effect of product market competition on going private decision. Using a sample of U.S. firms that went private from 1990 to 2015, I find that firms operating in concentrated industries are more likely to go private. Using tariff reductions in 1990-2005 as a quasi-natural experiment, I show that firms are less likely to go private after tariff reductions. The results are robust to different model specifications. In addition, the characteristics of the firms that went privateare significantly different from those of the firms remaining public, even at the time of IPO.