Abstract

http://ssrn.com/abstract=1954788
 
 

References (436)



 
 

Citations (11)



 


 



Where Have All the IPOs Gone?


Jay R. Ritter


University of Florida - Department of Finance, Insurance and Real Estate

Xiaohui Gao


University of Hong Kong - Faculty of Business and Economics

Zhongyan Zhu


Chinese University of Hong Kong - Department of Finance

August 26, 2013


Abstract:     
During 1980-2000, an average of 310 companies per year went public in the U.S. Since the technology bubble burst in 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 U.S. IPO activity. Our alternative explanation 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 remaining as an independent firm. Consistent with this hypothesis, we document that small company IPOs have had declining profitability and an increasing probability of being involved in acquisitions.

Number of Pages in PDF File: 56

Keywords: IPO volume, trade sales, economies of scope, effects of Sarbanes-Oxley, VC exits

JEL Classification: G24, G38

working papers series


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Date posted: November 5, 2011 ; Last revised: September 26, 2013

Suggested Citation

Ritter, Jay R. and Gao, Xiaohui and Zhu, Zhongyan, Where Have All the IPOs Gone? (August 26, 2013). Available at SSRN: http://ssrn.com/abstract=1954788 or http://dx.doi.org/10.2139/ssrn.1954788

Contact Information

Jay R. Ritter (Contact Author)
University of Florida - Department of Finance, Insurance and Real Estate ( email )
P.O. Box 117168
Gainesville, FL 32611
United States
(352) 846-2837 (Phone)
(352) 392-0301 (Fax)
HOME PAGE: http://bear.cba.ufl.edu/ritter
Xiaohui Gao
University of Hong Kong - Faculty of Business and Economics ( email )
Pokfulam Road
Hong Kong, Pokfulam HK
China
852-28591031 (Phone)
852-25481152 (Fax)
HOME PAGE: http://www.sef.hku.hk/~xiaohui/
Zhongyan Zhu
Chinese University of Hong Kong - Department of Finance ( email )
Shatin, N.T.
Hong Kong
3943-7759 (Phone)
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