Initial Public Offerings and the Local Economy

45 Pages Posted: 27 May 2022

See all articles by Jess Cornaggia

Jess Cornaggia

Pennsylvania State University - Department of Finance

Matthew Gustafson

Pennsylvania State University - Smeal College of Business

Jason D. Kotter

Brigham Young University - Department of Finance

Kevin Pisciotta

University of Kansas - School of Business

Multiple version iconThere are 2 versions of this paper

Abstract

We find that areas hosting large companies that go public experience muted growth in employment, establishments, and population, relative to areas where similar firms remain private. These effects initiate in the tradable sector and follow in the non-tradable sector, are more pronounced in densely populated areas, and are strongest near the IPO firm’s headquarters. Establishment-level analyses suggest that 24% to 37% of the effect derives directly from the firm itself with the remaining portion being due to spillover effects. Overall, our results indicate that macroeconomic gains from IPOs trade off against disruptions in local agglomeration economies where public firms originate.

Keywords: Local Agglomerations, Employment Growth, Initial Public Offerings, Firm Ownership

Suggested Citation

Cornaggia, Jess and Gustafson, Matthew and Kotter, Jason D. and Pisciotta, Kevin, Initial Public Offerings and the Local Economy. Available at SSRN: https://ssrn.com/abstract=4121291 or http://dx.doi.org/10.2139/ssrn.4121291

Jess Cornaggia

Pennsylvania State University - Department of Finance ( email )

University Park, PA 16802
United States

HOME PAGE: http://https://directory.smeal.psu.edu/jnc29

Matthew Gustafson (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

East Park Avenue
University Park, PA 16802
United States

Jason D. Kotter

Brigham Young University - Department of Finance ( email )

United States

Kevin Pisciotta

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
11
Abstract Views
68
PlumX Metrics