Ceris-CNR Working paper 10/2004

 

GOING PUBLIC TO GROW?
EVIDENCE FROM A PANEL OF ITALIAN FIRMS

 

Robert E. Carpenter* 
UMBC and  The Levy Economics Institute

   Laura Rondi**
 Ceris-Cnr
 
Abstract. This paper investigates the consequences of the going public decision for the growth of Italian firms using US firms as a benchmark for comparison.  We find Italian firms conducting IPOs are larger than US firms, but raise fewer funds from the IPO and grow more slowly afterwards. We also compare Italian IPOs across time.  Firms going public in the 1990s display features that are more similar to US IPOs.  We describe changes to the Italian economy and financial markets potentially responsible for the change. We also compare firms of different size and with different governance structure, and we find that they behave differently after going public.  Our results suggest that public policies that simply increase access to equity markets may not be effective unless they provide incentives for the firms’ decision-makers to use the new capital to grow.

Keywords: Initial public offerings; Going public; Firm growth; Business groups and Small firms;  Italian stock markets

JEL Classification: G30, G32, L21, O16

 

SCARICA QUESTO WP

 

*Department of Economics, UMBC, Baltimore, MD 21250 USA.
Phone:  1-410 455 6590. 
bobc@umbc.edu

**Ceris-Cnr, Institute for Economic Research on Firms and Growth, National Research Council,
Via Avogadro 8, 10121 Torino, Italy.
Phone: 39-011-5601209. 
L.Rondi@ceris.cnr.it