Where Have All the IPOs Gone? Trade Liberalization and the Changing Nature of U.S. Public Corporations
Journal of Financial and Quantitative Analysis, Forthcoming
67 Pages Posted: 10 Dec 2018 Last revised: 16 Nov 2023
Date Written: November 15, 2023
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 tariff 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