When Do Firms Go Public? Stock and Bond IPOs in Belgium, 1839-1935

38 Pages Posted: 4 Sep 2020

See all articles by Marc Deloof

Marc Deloof

University of Antwerp; University of Antwerp - Antwerp Management School

Abe de Jong

Rotterdam School of Management, Erasmus University; Monash University; European Corporate Governance Institute (ECGI)

Wilco Legierse

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: July 22, 2020

Abstract

This paper investigates the timing of a firm’s first security issue in public capital markets. We explain fluctuations over time in initial public offerings of bonds and stocks. We study Belgium in the period 1839-1935, a setting with poor investor protection, no tax distortions and changing governmental regulations. We find that economic growth leads to stock and bond IPOs and that both types of issues are timed to coincide with favorable market conditions. These effects are the strongest when the securities market has reached a mature level of development. We also find that bond IPOs coincide with more stock IPOs. Finally, our results suggest that a deregulation shock in 1873, which deregulated security markets and made it much easier to set up a firm and list securities, did not directly affect the number of IPOs, but facilitated a booming securities market in later years.

Keywords: Stock IPO, Bond IPO, Regulation, Investor Protection, Belgium

JEL Classification: G32, G38

Suggested Citation

Deloof, Marc and de Jong, Abe and Legierse, Wilco, When Do Firms Go Public? Stock and Bond IPOs in Belgium, 1839-1935 (July 22, 2020). Available at SSRN: https://ssrn.com/abstract=3661198 or http://dx.doi.org/10.2139/ssrn.3661198

Marc Deloof (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
Belgium
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

HOME PAGE: http://https://www.uantwerpen.be/en/staff/marc-deloof/

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

Abe De Jong

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-25
Rotterdam, 3000 DR
Netherlands
+31 10 408 1022 (Phone)

HOME PAGE: http://https://www.rsm.nl/people/abe-de-jong/

Monash University ( email )

900 Dandenong Rd
Room H3-56
Caulfield East, Victoria 3145
Australia

HOME PAGE: http://https://research.monash.edu/en/persons/abe-de-jong

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Wilco Legierse

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
22
Abstract Views
205
PlumX Metrics