The Law and Economics of the Going-Public Decision

37 Pages Posted: 18 Sep 2018

See all articles by Jay Kesten

Jay Kesten

Florida State University - College of Law

Date Written: May 2018

Abstract

An IPO is one of the most important events in the life-cycle of a developing firm. The going-public decision is, however, complicated by the persistently cyclical market for public offerings. This Chapter analyzes the macroeconomic determinants of IPO market cyclicality alongside the strategic and corporate governance considerations faced by private firms arising from the costs and benefits of going public. The law and economics of the going public decision is also relevant to the secular decline in IPOs since the turn of the millennium. This Chapter evaluates several competing and complementary hypotheses that attempt to explain this phenomenon, each of which relies at least in part on the various features of the going public decision-making process.

Keywords: IPO, initial public offering, IPO cycles, venture capital, private equity, political uncertainty, private benefits of control

JEL Classification: G24, G30, G32, G34, K22

Suggested Citation

Kesten, Jay, The Law and Economics of the Going-Public Decision (May 2018). The Oxford Handbook of IPOs (Oxford University Press, Forthcoming) ; FSU College of Law, Public Law Research Paper No. 893; FSU College of Law, Law, Business & Economics Paper No. 18-10. Available at SSRN: https://ssrn.com/abstract=3245384

Jay Kesten (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

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