Securities Market Reforms and Market Segments for IPOs: An Analysis of Listing and Delisting Decisions in Germany

52 Pages Posted: 3 Dec 2018 Last revised: 13 Feb 2019

See all articles by Wolfgang Bessler

Wolfgang Bessler

Justus-Liebig-University Giessen

Johannes Beyenbach

Handelshochschule Leipzig (HHL) - Center for Corporate Governance

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Marco Vendrasco

Justus-Liebig-University Giessen

Date Written: November 20, 2018

Abstract

This study investigates the listing of IPOs and the delisting from the Prime Standard, the highest regulated stock exchange segment in Germany. The German Stock Exchange instituted this market segment subsequent to the high-technology new economy period in 2003. For a sample of 531 firms, we analyze the economic reasons and consequences of firms entering and leaving this stock market segment during the 2003 to 2015 period. The main reasons are bankruptcy, acquisitions, delisting and most importantly transfers to lower market segments. We used several logit and firm-fixed effects regressions to provide new evidence for firms’ delisting and segment change decisions. Low growth opportunities and low operating performance increase the probability that firms switch to a lower market segment. Consequently, the firms’ cost-benefit considerations are an important explanation for selecting the preferred stock market segment and the transfer to a less regulated market environment.

Keywords: Securities market organization, corporate governance, regulatory reforms, going public, going dark, segment transfer, delisting

JEL Classification: G14; G18; G30; G32; G39

Suggested Citation

Bessler, Wolfgang and Beyenbach, Johannes and Rapp, Marc Steffen and Vendrasco, Marco, Securities Market Reforms and Market Segments for IPOs: An Analysis of Listing and Delisting Decisions in Germany (November 20, 2018). Available at SSRN: https://ssrn.com/abstract=3288663 or http://dx.doi.org/10.2139/ssrn.3288663

Wolfgang Bessler (Contact Author)

Justus-Liebig-University Giessen ( email )

Center for Finance and Banking
Licher Strasse 74
Giessen, D-35394
Germany
49-641-9922460 (Phone)
49-641-9922469 (Fax)

HOME PAGE: http://wiwi.uni-giessen.de/home/Bessler/

Johannes Beyenbach

Handelshochschule Leipzig (HHL) - Center for Corporate Governance ( email )

Jahnallee 59
Leipzig, 04109
Germany

Marc Steffen Rapp

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

Marco Vendrasco

Justus-Liebig-University Giessen ( email )

Licher Strasse 74
Giessen, 35394
Germany

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