Vol.:(0123456789) SN Bus Econ (2021) 1:46 https://doi.org/10.1007/s43546-021-00052-x ORIGINAL ARTICLE Control dilution of an initial owner post‑IPO: the impact of characteristics of ownership structure Rihab Kriaa 1,2  · Taher Hamza 3,4 Received: 19 July 2020 / Accepted: 25 January 2021 / Published online: 24 February 2021 © The Author(s), under exclusive licence to Springer Nature Switzerland AG part of Springer Nature 2021 Abstract In this paper, we investigate the impact of ownership structure’s characteristics on the probability of initial controlling shareholder’s (ICS) control dilution from a frm’s listing year to the fve-year post-initial public ofering (post-IPO) in the French context. We test in particular the efect of private benefts of control and family ownership and control concentration on control dilution. Using a sample of 165 French IPO frms over the period 1999–2010, we provide evidence that: (i) The probability of ICS’s control dilution decreases with high private benefts of control. (ii) A family ICS is less likely to experience control dilution than a non-family one. (iii) The probability of control dilution increases when the frm has a concentrated ownership. Therefore, agency problems and diversifcation are strong motivations for control dilution post-IPO. Our fndings are robust even after using alternative control level and after running logit regression. Keywords Family frm · Initial public ofering · Initial controlling shareholder · Control dilution · Private benefts of control JEL Classifcation G32 · G34 * Rihab Kriaa rihab.kriaa@yahoo.fr Taher Hamza taher.hamza@topnet.tn 1 LAMIDED Lab, University of Sousse, Sousse, Tunisia 2 ISG, University of Sousse, Rue Abdlaaziz IL Behi, Bp 763, 4000 Sousse, Tunisia 3 HEC, University of Carthage, Carthage, Tunisia 4 VALLOREM Lab, Université of Orléans, Orléans, France