Where Have All the IPOs Gone
TLDR
In this article, the authors propose an alternative explanation for the decline in the number of initial public offerings in the United States: the advantages of selling out to a larger organization, which can speed a product to market and realize economies of scope, have increased relative to the benefits of operating as an independent firm.Abstract:
During 1980–2000, an average of 310 companies per year went public in the United States. Since 2000, the average has been only 99 initial public offerings (IPOs) per year, with the drop especially precipitous among small firms. Many have blamed the Sarbanes-Oxley Act of 2002 and the 2003 Global Settlement’s effects on analyst coverage for the decline in IPO activity. We find very little support for the conventional wisdom, and we offer an alternative explanation. Our economies of scope hypothesis posits that the advantages of selling out to a larger organization, which can speed a product to market and realize economies of scope, have increased relative to the benefits of operating as an independent firm.read more
Citations
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ASX small firm/microcap listings: the IPO ‘Pop’ and two decades of subsequent returns
The Degree of Underpricing in the Swedish Market : An analysis of the most relevant factors influencing IPO underpricing between main and secondary markets
Xiaofan Hu,Lars Andreas Sundberg +1 more
TL;DR: Underwriters evaluate the optimum price of IPO issued shares and conduct underpricing based on a higher degree of risk and information asymmetry as discussed by the authors, which is calculated under a series of determined r...
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Is the Public Corporation Really in Eclipse? Evidence from the Asia‐Pacific
G. Andrew Karolyi,Dawoon Kim +1 more
TL;DR: For example, this paper found that Asia-Pacific firms invest more in R&D and less in capital expenditures, as do US firms, and have higher cash holdings as a fraction of total assets.
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The Demise of the NYSE and Nasdaq: Market Quality in the Age of Market Fragmentation
TL;DR: In this paper , the authors show that the U.S. equity exchanges have experienced a dramatic increase in competition from new entrants, resulting in the fragmentation of trading across venues, and that most of the improvements have accrued to the largest stocks.
References
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