Initial Public Offerings Over the Industry Life Cycle

55 Pages Posted: 5 Sep 2018

See all articles by Amrita Nain

Amrita Nain

University of Iowa - Henry B. Tippie College of Business

Jie Ying

Southern Illinois University at Edwardsville - Department of Economics & Finance

Date Written: August 28, 2018

Abstract

We provide new evidence on IPOs over the industry life cycle. Less innovative, financially constrained firms seek public equity earlier in an industry’s life cycle. Moreover, average profitability of early IPOs is lower when more private capital flows to the industry early in its growth phase. Our results suggest that availability of private capital enables better-performing firms to avoid early public issuance without incurring a long-term product market disadvantage. However, delayed IPOs carry a cost for public investors. By the time late issuers tap public markets, the period of high market-share growth and high returns for equity investors has passed.

Keywords: IPOs, Industry life cycle, firm survival

JEL Classification: G30

Suggested Citation

Nain, Amrita and Ying, Jie, Initial Public Offerings Over the Industry Life Cycle (August 28, 2018). Available at SSRN: https://ssrn.com/abstract=3239726 or http://dx.doi.org/10.2139/ssrn.3239726

Amrita Nain (Contact Author)

University of Iowa - Henry B. Tippie College of Business ( email )

Acquisitions
5020 Main Library
Iowa City, IA 52242-1000
United States

Jie Ying

Southern Illinois University at Edwardsville - Department of Economics & Finance ( email )

Edwardsville, IL 62026
United States

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