The DOI matches its Crossref record; 22 of the 22 references it cites were found in a registry or an index.
A Theory of the Going-Public Decision
Abstract
We address the question: At what stage in its life should a firm go public rather than undertake its projects using private equity financing? In our model a firm may raise external financing either by placing shares privately with a risk-averse venture capitalist or by selling shares in an IPO to numerous small investors. The entrepreneur has private information about his firm's value, but outsiders can reduce this informational disadvantage by evaluating the firm at a cost. The equilibrium timing of the going-public decision is determined by the firm's trade-off between minimizing the duplication in information production by outsiders (unavoidable in the IPO market, but mitigated by a publicly observable share price) and avoiding the risk-premium demanded by venture capitalists. Testable implications are developed for the cross-sectional variations in the age of going-public across industries and countries.
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Cites
Financial intermediation and delegated monitoring
Diamond, D. W. (1984) · The Review of Economic Studies · doi:10.2307/2297430 · Cited by 8,476
Monitoring and reputation: The choice between bank loans and directly placed debt
Diamond, D. W. (1991) · Journal of Political Economy · doi:10.1086/261775 · Cited by 3,331
Why new issues are underpriced
Rock, K. (1986) · Journal of Financial Economics · doi:10.1016/0304-405x(86)90054-1 · Cited by 2,788
The structure and governance of venture-capital organizations
Sahlman, W. A. (1990) · Journal of Financial Economics · doi:10.1016/0304-405x(90)90065-8 · Cited by 2,609
Why Do Companies Go Public? An Empirical Analysis
Pagano, M., Panetta, F., & Zingales, L. (1998) · The Journal of Finance · doi:10.1111/0022-1082.25448 · Cited by 1,863
How investment bankers determine the offer price and allocation of new issues
Benveniste, L. M., & Spindt, P. A. (1989) · Journal of Financial Economics · doi:10.1016/0304-405x(89)90051-2 · Cited by 1,815
The "Hot Issue" Market of 1980
Ritter, J. R. (1984) · The Journal of Business · doi:10.1086/296260 · Cited by 1,583
Signalling by underpricing in the IPO market
Allen, F., & Faulhaber, G. R. (1989) · Journal of Financial Economics · doi:10.1016/0304-405x(89)90060-3 · Cited by 1,450
Grandstanding in the venture capital industry
Gompers, P. A. (1996) · Journal of Financial Economics · doi:10.1016/0304-405x(96)00874-4 · Cited by 1,347
The role of venture capital in the creation of public companies
Barry, C. B., Muscarella, C. J., Peavy, J. W., & Vetsuypens, M. R. (1990) · Journal of Financial Economics · doi:10.1016/0304-405x(90)90064-7 · Cited by 1,167
Cited by
Initial Public Offerings: An Analysis of Theory and Practice
BRAU, J. C., & FAWCETT, S. E. (2006) · The Journal of Finance · doi:10.1111/j.1540-6261.2006.00840.x · Cited by 837
PÁSTOR, Ľ., & VERONESI, P. (2005) · The Journal of Finance · doi:10.1111/j.1540-6261.2005.00778.x · Cited by 420
Technological Innovation and Initial Public Offerings
Maksimovic, V., & Pichler, P. (2001) · Review of Financial Studies · doi:10.1093/rfs/14.2.459 · Cited by 357
Why Do Firms Use Private Equity to Opt Out of Public Markets?
Bharath, S. T., & Dittmar, A. K. (2010) · Review of Financial Studies · doi:10.1093/rfs/hhq016 · Cited by 247
I.P.O. determinants of delisting risk: Lessons from the Athens Stock Exchange
Makrominas, M., & Yiannoulis, Y. (2021) · Accounting Forum · doi:10.1080/01559982.2021.1885253 · Cited by 13
Metadata
- Authors
- Chemmanur, T. J., & Fulghieri, P.
- Venue
- Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 1999-04
- Volume
- 12
- Issue
- 2
- Pages
- 249-279
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W2117777479
- Cited by
- 668
- References
- 22
- FWCI
- 54.37
- Type
- journal article
- Language
- en
- Open access
- closed
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
