The Broader Impact of IPOs

70 Pages Posted: 27 Aug 2021 Last revised: 13 Aug 2023

See all articles by Feng Jiang

Feng Jiang

University at Buffalo - School of Management

Michelle Lowry

Drexel University; European Corporate Governance Institute (ECGI)

Yiming Qian

University of Connecticut - Department of Finance

Date Written: August 11, 2023


The decrease in companies going public has received widespread attention, and the associated costs are widely debated. We document one widespread benefit of IPOs: increased stock market participation, including among people not directly associated with the heretofore private firm. Stock market participation represents a key factor toward building wealth. We find that local IPOs increase households’ propensity to own stock and their percent equity holdings. The attention channel drives effects: local IPOs attract attention to the market, through increased information production and publicity. The wealth channel has little influence, consistent with local IPOs not generating wealth shocks for most households.

Keywords: IPO, household finance, stock market participation, attention, local agglomeration

Suggested Citation

Jiang, Feng and Lowry, Michelle B. and Qian, Yiming, The Broader Impact of IPOs (August 11, 2023). Available at SSRN: or

Feng Jiang

University at Buffalo - School of Management ( email )

344 Jacobs Management Center
Buffalo, NY 14260
United States
716-645-3225 (Phone)

Michelle B. Lowry

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

European Corporate Governance Institute (ECGI) ( email )

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

Yiming Qian (Contact Author)

University of Connecticut - Department of Finance ( email )

2100 Hillside Road U-1041F, Room 452
Storrs, CT 06269
United States
860-486-2774 (Phone)

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