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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26509
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| Title: | On the decision to go public: Evidence from privately-held firms |
| Authors: | Boehmer, Ekkehart
Ljungqvist, Alexander |
| Keywords: | Going public decision
IPO timing
Private benefits
Private benefits |
| Issue Date: | Feb-2004 |
| Series/Report no.: | FIN-04-002 |
| Abstract: | We test recent theories of when companies go public which predict that
1) more companies will go public when outside valuations are high or
have increased, 2) companies prefer going public when uncertainty about
their future profitability is high, and 3) firms whose controlling
shareholders enjoy large private benefits of control are less likely to
go public. Our analysis tracks a set of 330 privatelyheld German firms
which between 1984 and 1995 announced their intention to go public to
see whether, when, and how they subsequently sold equity to outside
investors. Controlling for private benefits, we find that the likelihood
of firms completing an initial public offering increases in the
firm’s investment opportunities and valuations. We also show that
these effects are distinct from factors that increase firms’
demand for outside capital more generally. |
| URI: | http://hdl.handle.net/2451/26509 |
| Appears in Collections: | Finance Working Papers
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