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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26509

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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