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Bernstein (2015) documents that public markets aid market welfare as going public enables firms more access to capital, which can facilitate increases in innovation activity. Ferreira et al. (2014) posit that as an initial public offering (IPO) becomes costly, innovation decreases, at least at the country level. However, both anecdotal evidence and empirical evidence suggest the opposite. According to the Bloomberg innovation index, the United States possesses both the most innovative technology companies and the eighth largest publicly traded technology companies. 1 Yet, Chen and Ritter (2000) document that IPO gross spreads, which measure the costs associated with underwriting an offering, are higher in the United States than in other countries. 2 Given that the country with the greatest number of innovative, high-technology firms also possesses the highest IPO costs is inconsistent with Ferreira, Manso and Silva's assertion that lower IPO costs can foster firm innovation in a country. While Hsu et al. ( 2014) provide empirical evidence supporting Ferreira, Manso, and Silva's contention that countries with well-developed equity markets are associated with more innovation, no study addresses whether firm-specific IPO costs impede a firm's ability to innovate after going public. To this end, we directly examine the relation between the firm-specific costs of going public and initial post-IPO firm innovation.Understanding the effects of IPO costs on a firm's subsequent innovation is critical because innovation plays a pivotal role in promoting economic growth (Kogan et al., 2017;Solow, 1957) and for a firm's survival (Guo & Zhou, 2016). IPO costs include explicit costs such as gross spreads (i.e., underwriter fees) and implicit costs of mispricing (i.e., underpricing). 3 To the extent that explicit costs of going public such as floatation costs, expenses, and gross spreads entail significant economic costs for the offering firm, less capital may be available for subsequent investment and innovation. If implied costs from underpricing entail