Where have all the IPOs gone? Trade liberalization and the changing nature of U.S. public corporations
47 Pages Posted: 10 Dec 2018 Last revised: 30 Mar 2021
Date Written: March 30, 2021
I show that a tariff policy change that increased trade with China led to a decline in U.S. public listing rates and elevated industry concentration. Consistent with heterogeneous firm models of trade, the shock impeded the entry and performance of small domestic manufacturers but did not adversely impact large multinationals. In addition, stock price reactions to the policy change and threat of reversal imply that trade liberalization creates or destroys value depending on firm size. These findings suggest that recent trends in the U.S. public equity market are driven, in part, by fundamental changes in the global competitive landscape.
Keywords: IPOs, Stock market listing, Industry concentration, Trade liberalization
JEL Classification: F65, G10, G30, G38
Suggested Citation: Suggested Citation