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Firm-Specific Determinants and Outcomes of Initial Public Offerings in Thailand, 2001–2007

27 Pages Posted: 11 Jan 2010  

Jirapun Anne Chorruk

Griffith University - Department of Accounting, Finance and Economics

Andrew C. Worthington

Griffith University

Date Written: January 11, 2010

Abstract

This paper examines the firm-specific determinants and outcomes of initial public offerings (IPOs) in Thailand using data on 5,228 private and newly publicly listed firms between 2001 and 2007. We use the listing requirements of the Stock Exchange of Thailand (SET) to identify all private firms compulsorily registered with the Department of Business Development, Thai Ministry of Commerce that are potential IPOs. Analysis of the determinants of IPOs reveals that firms that are younger, larger, more leveraged and with lower interest rates from borrowing are more likely to list. Analysis of post-IPO performance suggests that Thai firms going public succeed in lowering their borrowing rates, and that unlike comparable findings elsewhere, profitability does not decline after listing. However, despite these findings, the rate of listing in Thailand remains relatively low, and the paper hypothesises that relatively high listing costs and the availability of alternative cheaper debt financing sources, the large shares of foreign subsidiary and small and medium-sized business operating in Thailand, along with market and political instability and cultural factors act against Thai IPOs.

Keywords: initial public offerings, decision to go public, listing costs and benefits

JEL Classification: G32, G24

Suggested Citation

Chorruk, Jirapun Anne and Worthington, Andrew C., Firm-Specific Determinants and Outcomes of Initial Public Offerings in Thailand, 2001–2007 (January 11, 2010). Available at SSRN: https://ssrn.com/abstract=1534447 or http://dx.doi.org/10.2139/ssrn.1534447

Jirapun Anne Chorruk

Griffith University - Department of Accounting, Finance and Economics ( email )

PMB 50
Gold Coast Queensland 9726
Australia

Andrew C. Worthington (Contact Author)

Griffith University ( email )

170 Kessels Road
Nathan, Queensland 4111
Australia
+61 (0)7 3735 4273 (Phone)
+61 (0)7 3735 3719 (Fax)

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