Abstract

http://ssrn.com/abstract=279302
 
 

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New Lists: Fundamentals and Survival Rates


Eugene F. Fama


University of Chicago - Finance

Kenneth R. French


Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

February 2003

CRSP Working Paper No. 530; Tuck Business School Working Paper No. 03-15

Abstract:     
The class of firms that obtain public equity financing expands dramatically in the 1980s and 1990s. After 1979, the rate at which new firms are listed on major U.S. stock exchanges jumps from about 160 to near 550 per year, and the characteristics of new lists change. The cross-section of new list profitability becomes progressively more left skewed, and growth becomes more right skewed. The result is a sharp decline in new list survival rates. We suggest that the changes in the characteristics of new lists are due to a decline in the cost of equity capital that allows weaker firms and firms with more distant expected payoffs to become viable candidates for public equity financing.

Note: Previously titled "New Lists and Seasoned Firms: Fundamentals and Survival Rates"

Number of Pages in PDF File: 57

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Date posted: May 7, 2003  

Suggested Citation

Fama, Eugene F. and French, Kenneth R., New Lists: Fundamentals and Survival Rates (February 2003). CRSP Working Paper No. 530; Tuck Business School Working Paper No. 03-15. Available at SSRN: http://ssrn.com/abstract=279302 or http://dx.doi.org/10.2139/ssrn.279302

Contact Information

Eugene F. Fama (Contact Author)
University of Chicago - Finance ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7282 (Phone)
773-702-9937 (Fax)
Kenneth R. French
Dartmouth College - Tuck School of Business ( email )
Hanover, NH 03755
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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