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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, September 29, 2012

Staudt Presents The Supercharged IPO and Is Gender-Based Policymaking Necessary in the 21st Century?

Nancy Staudt Staudt(USC) presented two papers recently:

In this article, we investigate a new and widely discussed financial innovation: the supercharged initial public offering (IPO). A supercharged IPO differs from a conventional IPO because it involves a contract provision that enables the original owners of a firm to extract large amounts of money from the company in the post-IPO period. Supercharged IPOs have generated substantial debate and controversy but no scholar or team of scholars has investigated why the supercharged IPO emerged and how it has spread across industries and geographic areas. We amassed a large dataset of IPOs and empirically investigate these questions. We find the motivation for pursuing this new deal structure relates to the parties’ desire to take advantage of tax arbitrage opportunities, and not to a devious plan by owner-founders to steal from unknowing public investors as many critics have argued. Our results also suggest, contrary to the existing literature, that while innovation in the IPO context is an on-going process—it tends to spike when the economy performs poorly. With respect to the process of use and diffusion, we find that the earliest innovators are firms widely viewed to be aggressive and flexible, such as those organized in tax havens. Over time, however, the diffusion process is best explained by two factors: elite lawyers and professional networks—especially those located in the New York City region. Owner-founders who seek to go public with the help of an IPO, tend to supercharge their IPO when their hire elite New York City lawyers.

On virtually every dimension, women’s life choices and experiences have changed, and most agree, these changes are for the better. Compared to the average woman thirty years ago, women today have higher levels of education, more stable career trajectories, better salaries, a longer life expectancy . . . the list continues. Because these economic and social changes appear cemented into women’s reality, we believe it is time to pose the following question: what role, if any, should policymakers play in promoting gender equality in the twenty first century? Quite a few scholars have investigated and advocated legal reform with the hopes of advancing women’s interests in the market, in the home, upon divorce, in retirement, and so forth. But given the recent and notable demographic developments and the feeling of equality and opportunity that many women now experience, it is important to determine whether these reform proposals are outdated and obsolete, or, alternatively, whether gender-based policymaking continues to be a worthwhile endeavor.

To answer this question, we reflect upon the theoretical and empirical lessons that have emerged vis-à-vis women’s lives since the early 1970s. We expect that many readers will be familiar with the scholarship and the data that we discuss, but we are unaware of any research that merges the theoretical insights found in the law, economics and sociology literature addressing families with the most up-to-date demographic trends. Indeed, we believe the juxtaposition of this research and knowledge will challenge an emerging view of gender dynamics, namely—equality has become reality—as well as the notion that feminist theory is an old-fashioned and largely irrelevant consideration in the present-day policy realm. We confess that we embarked upon this project with the idea that the need for gender-based policymaking had begun to fade, but we conclude with a far more nuanced understanding of the modern world and women’s ability to achieve success and economic stability in both the public and private spheres.

Colloquia, Scholarship, Tax | Permalink

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