The Timing of Voluntary Delisting

58 Pages Posted: 13 Jan 2020 Last revised: 14 Mar 2024

See all articles by Alcino Azevedo

Alcino Azevedo

Aston Business School

Gonul Colak

University of Sussex ; Hanken School of Economics

Izidin El Kalak

Cardiff Business School

Radu Tunaru

University of Sussex

Date Written: April 21, 2021

Abstract

For many firms, voluntarily delisting from a stock exchange can be optimal. We model an en- trepreneur’s incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm’s performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.

Keywords: Voluntary Delisting; Political Uncertainty; Regulatory Uncertainty; Competing Risk

JEL Classification: G32, G34, G38, G81

Suggested Citation

Azevedo, Alcino and Colak, Gonul and El Kalak, Izidin and Tunaru, Radu, The Timing of Voluntary Delisting (April 21, 2021). Available at SSRN: https://ssrn.com/abstract=3508939 or http://dx.doi.org/10.2139/ssrn.3508939

Alcino Azevedo

Aston Business School ( email )

Econ., Finance & Enterpreneurship
Aston Business School
Birmingham, B4 7ET
United Kingdom

Gonul Colak

University of Sussex ( email )

Jubilee Building
Falmer
Brighton, BN1 9SN
United Kingdom

Hanken School of Economics ( email )

P.O. Box 479
Arkadiankatu 22
FI-00100 Helsinki, 00100
Finland

Izidin El Kalak (Contact Author)

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Radu Tunaru

University of Sussex ( email )

Jubilee
Brighton, BN1 9SL
United Kingdom

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