IPOs on the Decline: The Role of Globalization

Irani, M. Vahid; Pinto, Gerard; Zhang, Donghang

doi:10.2139/ssrn.4570849

Cited by 2 publications

(1 citation statement)

References 55 publications

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“…Importantly, Eckbo & Lithell (2022) find that the decline in US public listings would disappear if one counted the target firms of public acquirers as independent firms. Irani, Pinto & Zhang (2022) posit that globalization can have a negative impact on IPO activity. It may be more costly to establish sales and supply channels in foreign countries than domestically.…”

Section: The Low Level Of Ipo Activity and The Growth Of Venture Capitalmentioning

confidence: 99%

IPOs and SPACs: Recent Developments

Huang

Ritter

Zhang

2023

Annu. Rev. Financ. Econ.

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After two decades of low initial public offering (IPO) activity and a number of regulatory changes, the number of IPOs of both operating companies and special purpose acquisition companies (SPACs) boomed in the United States in 2021 before collapsing in 2022. In recent years, surging valuations have resulted in many private companies achieving “unicorn” status, a valuation of $1 billion or more, partly fueled by investments from mutual funds. Many of the unicorns that have gone public have done so with dual-class share structures. We compare three alternative mechanisms for going public, including traditional IPOs, mergers with SPACs, and direct listings. The most common exit for successful venture capital–backed companies, however, continues to be by merging with a larger company. Expected final online publication date for the Annual Review of Financial Economics, Volume 15 is November 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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Section: The Low Level Of Ipo Activity and The Growth Of Venture Capitalmentioning

confidence: 99%

IPOs and SPACs: Recent Developments

Huang

Ritter

Zhang

2023

Annu. Rev. Financ. Econ.

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Where Have All the IPOs Gone? Trade Liberalization and the Changing Nature of U.S. Public Corporations

Griffin

2023

J. Financ. Quant. Anal.

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I show that a tariff policy change that increased trade with China led to a decline in U.S. public listing rates and elevated industry concentration. Consistent with heterogeneous firm models of trade, the shock impeded the entry and performance of small domestic manufacturers but did not adversely impact large multinationals. In addition, stock price reactions to the tariff policy change and threat of reversal imply that trade liberalization creates or destroys value depending on firm size. These findings suggest that recent trends in the U.S. public equity market are driven, in part, by fundamental changes in the global competitive landscape.

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IPOs on the Decline: The Role of Globalization

Cited by 2 publications

References 55 publications

IPOs and SPACs: Recent Developments

IPOs and SPACs: Recent Developments

Where Have All the IPOs Gone? Trade Liberalization and the Changing Nature of U.S. Public Corporations

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