Local Economic Spillover Effects of Stock Market Listings

85 Pages Posted: 27 Nov 2015 Last revised: 7 Dec 2018

See all articles by Alexander W. Butler

Alexander W. Butler

Rice University - Jesse H. Jones Graduate School of Business

Larry Fauver

University of Tennessee, Knoxville - Department of Finance; University of Tennessee

Ioannis Spyridopoulos

American University, Kogod School of Business

Date Written: December 5, 2018

Abstract

We show that IPOs have non-trivial positive spillover effects on local labor markets, business environments, consumer spending, real estate, and migration. We mitigate endogeneity concerns about unobserved heterogeneity with restrictive geographic fixed effects coupled with a matching procedure. We show that it is the listing decision, which encompasses both a wealth and liquidity shock, that induces economic spillovers. Conditional on an IPO occurring, we estimate that an additional $10 million in IPO proceeds is associated with an extra 41 jobs and 0.7 new establishments locally.

Keywords: IPOs, Per Capita Income, Economic Growth, Listing Status, Spillover

Suggested Citation

Butler, Alexander W. and Fauver, Larry and Spyridopoulos, Ioannis, Local Economic Spillover Effects of Stock Market Listings (December 5, 2018). Available at SSRN: https://ssrn.com/abstract=2695464 or http://dx.doi.org/10.2139/ssrn.2695464

Alexander W. Butler (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

MS 531
Houston, TX 77005
United States
713-348-6341 (Phone)

HOME PAGE: http://www.owlnet.rice.edu/~awbutler/

Larry Fauver

University of Tennessee, Knoxville - Department of Finance ( email )

424 Stokely Management Center
Knoxville, TN 37996
United States

University of Tennessee ( email )

424 Stokely Management Center
Department of Finance
Knoxville, TN 37996-0540
United States
865-974-1722 (Phone)
865-974-1716 (Fax)

Ioannis Spyridopoulos

American University, Kogod School of Business ( email )

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

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