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
More filters
Journal ArticleDOI
Corporate Acquisitions, Diversification, and the Firm's Life Cycle: Corporate Acquisitions, Diversification, and the Firm's Life Cycle
Asli M. Arikan,René M. Stulz +1 more
Journal ArticleDOI
Unicorns, Cheshire cats, and the new dilemmas of entrepreneurial finance
Martin Kenney,John Zysman +1 more
TL;DR: In this article, the authors examine the implications of the evolving environment for the formation and financing of new firms in the United States after the dot.com crash of 2000, there was a regime change in new...
Journal ArticleDOI
The international zero-leverage phenomenon
TL;DR: In this article, the authors analyzed the zero-leverage phenomenon around the world and found that countries with a common law system, high creditor protection, and a dividend imputation or dividend relief tax system exhibit the highest percentage of zero leverage firms.
ReportDOI
Corporate Acquisitions, Diversification, and the Firm's Lifecycle
Asli M. Arikan,René M. Stulz +1 more
TL;DR: In this paper, the authors show that while younger firms make more related and diversifying acquisitions than mature firms, the acquisition rate follows a U-shape over firms' life cycle.
Journal ArticleDOI
The Persistence of Long-Run Abnormal Returns Following Stock Repurchases and Offerings
Fangjian Fu,Sheng Huang +1 more
TL;DR: The long-run abnormal returns following both stock repurchases and seasoned equity offerings disappear for the events in 2003–2012, associated with the changing market environment: increased institutional investment, decreased trading costs, improved liquidity, and enhanced regulations on corporate governance and information disclosure.
References
More filters
Journal ArticleDOI
The structure and governance of venture-capital organizations
TL;DR: The authors describes and analyzes the structure of VC organizations, focusing on the relationship between investors and venture capitalists and between venture-capital firms and the ventures in which they invest, and contrasts VC organizations with large, publicly traded corporations and with leveraged buyout organizations.
Journal ArticleDOI
Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk
TL;DR: In this paper, the authors used a disaggregated approach to study the volatility of common stocks at the market, industry, and firm levels and found that over the period from 1962 to 1997 there has been a noticeable increase in firm-level volatility relative to market volatility.
Journal ArticleDOI
Do Brokerage Analysts' Recommendations Have Investment Value?
TL;DR: In this article, an analysis of new buy and sell recommendations of stocks by security analysts at major U.S. brokerage firms shows significant, systematic discrepancies between pre-recommendation prices and eventual values.
Journal ArticleDOI
Venture capitalists and the decision to go public
TL;DR: This article examined the timing of initial public offerings and private financings by venture capitalists and found that seasoned VCs are particularly proficient at taking companies public near market peaks, and that these companies go public when equity valuations are high and employ private finance when values are lower.