Abstract

http://ssrn.com/abstract=1108341
 
 

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Do Favorable Market Conditions Lead to Costly Decisions to Go Public?


Azizjon Alimov


City University of Hong Kong

Wayne H. Mikkelson


University of Oregon - Department of Finance

August 24, 2009

AFA 2009 San Francisco Meetings Paper

Abstract:     
We investigate the real effects of decisions to undertake an initial public offering of stock in favorable market conditions. Specifically, we examine potential effects on investment expenditures, operating performance and likelihood of survival. We find that the average firm going public during favorable market conditions, characterized by a high investor sentiment index, subsequently increases acquisitions and R&D expenditures. We do not find, however, that these changes in investment lead to worse operating performance or a higher incidence of firm failure. Our findings do not support the hypothesis that decisions to go public in favorable market conditions lead to undesirable real effects.

Number of Pages in PDF File: 41

Keywords: initial public offerings, market conditions, operating performance, delisting rates

JEL Classification: C14, G30

working papers series





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Date posted: March 25, 2008 ; Last revised: February 18, 2013

Suggested Citation

Alimov, Azizjon and Mikkelson, Wayne H., Do Favorable Market Conditions Lead to Costly Decisions to Go Public? (August 24, 2009). AFA 2009 San Francisco Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1108341 or http://dx.doi.org/10.2139/ssrn.1108341

Contact Information

Azizjon Alimov (Contact Author)
City University of Hong Kong ( email )
83 Tat Chee Avenue
Kowloon
Hong Kong
(852) 3442-2168 (Phone)
(852) 3442-0195 (Fax)
Wayne H. Mikkelson
University of Oregon - Department of Finance ( email )
Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States
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