We find that listed parents’ carve-outs have investment-cash-flow sensitivities 70 per cent lower than unlisted parents’ carve-outs, on average. Such a finding is stronger when we consider only equity carve-outs in technological industries. The finding suggests that listed parents are more capable of alleviating the financial constraint of their carved-out units than private parents. Our further analysis shows that listed parents’ carve-outs also have a lower cost of equity than their counterparts, but such difference cannot be explained by corporate transparency, as implied by analyst coverage and analysts’ forecast dispersion. Therefore, we argue that the benefits from affiliation with a listed parent to the carve-out come mainly from the parent’s financial support rather than an increase in corporate transparency.