Why Do Companies Go Public? An Empirical Analysis

Journal of Finance - Tập 53 Số 1 - Trang 27-64 - 1998
Marco Pagano1, Fabio Panetta2, Luigi Zingales3
1Università di Salerno and CEPR
2Banca d'Italia
3University of Chicago, NBER, and CEPR

Tóm tắt

Using a large database of private firms in Italy, we analyze the determinants of initial public offerings (IPOs) by comparing the ex ante and ex post characteristics of IPOs with those of private firms. The likelihood of an IPO is increasing in the company's size and the industry's market‐to‐book ratio. Companies appear to go public not to finance future investments and growth, but to rebalance their accounts after high investment and growth. IPOs are also followed by lower cost of credit and increased turnover in control.

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