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Where Have All the IPOs Gone?

Journal of financial and quantitative analysis, 2013-12, Vol.48 (6), p.1663-1692 [Peer Reviewed Journal]

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Title:
Where Have All the IPOs Gone?
Author: Gao, Xiaohui ; Ritter, Jay R. ; Zhu, Zhongyan
Subjects: Business structures ; Compliance costs ; Drought ; Economic trends ; Economies of scale ; Economies of scope ; Initial public offerings ; Profitable firms ; Public companies ; Public Company Accounting Reform & Investor Protection Act 2002-US ; Quantitative analysis ; Real gross domestic product ; Small business ; Wisdom
Is Part Of: Journal of financial and quantitative analysis, 2013-12, Vol.48 (6), p.1663-1692
Description: 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.
Publisher: New York, USA: Cambridge University Press
Language: English
Identifier: ISSN: 0022-1090
EISSN: 1756-6916
DOI: 10.1017/S0022109014000015
Source: ProQuest Central

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