Investigación
calendar_month Publicación: 10/02/2025
The Effects of Going Public on Firm Profitability and Strategy
Autor: Borja Larraín, Francisco Urzúa, Giorgo Sertsios, Gordon Phillips
We study the effects of going public using a unique panel of firms in 16 European countries for which we observe financial data before and after initial public offering (IPO) attempts. We compare completed and withdrawn IPO attempts. We instrument the decision to complete the IPO using prior market returns. After instrumenting, we isolate a positive causal effect of going public on profitability. We also find a post-IPO expansion in sales per employee, subsidiaries, and countries in which firms operate. Overall, our results are consistent with going public relaxing financial constraints and inducing a shift in strategy towards increased commercialization.
Fuente: Review of Finance Studies
