The Disappearing IPO Puzzle: New Insights from Proprietary U.S. Census Data on Private Firms

The IPO volume in the U.S. significantly declines after 2000, with more entrepreneurial firms exiting through acquisitions rather than IPOs. Using proprietary U.S. Census data on private firms, we examine a comprehensive set of hypotheses to explain the above phenomena. We find support for explanations based on standalone public firms’ greater sensitivity to product market competition and private firms’ access to more abundant private equity financing post-2000. We find mixed or no evidence for explanations based on a weaker US economy, smaller net financial benefits from being standalone public firms, or an increased need for confidentiality after 2000.

Keywords: Exit Choices, Disappearing IPOs, Private Equity, Weak Economy, Product Market Competition

JEL Classification: G32, G34, G24

Suggested Citation: Suggested Citation

Chemmanur, Thomas J. and He, Jie and Ren, Xiao and Shu, Tao, The Disappearing IPO Puzzle: New Insights from Proprietary U.S. Census Data on Private Firms (January 30, 2022). Available at SSRN: https://ssrn.com/abstract=3556993 or http://dx.doi.org/10.2139/ssrn.3556993

Thomas J. Chemmanur

Boston College - Carroll School of Management ( email )

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