Is Public Ownership Bad for Professional Service Firms? Ad Agency Ownership, Performance, and Creativity

Academy of Management Journal, Forthcoming

43 Pages Posted: 2 Mar 2006

See all articles by Andrew von Nordenflycht

Andrew von Nordenflycht

Simon Fraser University (SFU) - Beedie School of Business; Massachusetts Institute of Technology (MIT) - Sloan School of Management

Abstract

Does public ownership have negative consequences for professional service firms by reducing employee incentives? I address this question with a panel of advertising agencies. Public ownership was associated with inferior performance for small agencies but not for large agencies; and there was no association between ownership and agency creativity, indicating that public ownership did not preclude agencies from competing with strategies requiring highly-skilled professionals. The results challenge existing theories of the ownership models of professional service firms.

Keywords: professional services, ownership, public ownership, going public, creativity, advertising

JEL Classification: D21, L84, G32, L22, M21

Suggested Citation

von Nordenflycht, Andrew, Is Public Ownership Bad for Professional Service Firms? Ad Agency Ownership, Performance, and Creativity. Academy of Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=886445

Andrew Von Nordenflycht (Contact Author)

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States