Interest rates and initial public offerings
By: Boyan Jovanovic, Peter L. Rousseau.
Contributors: Rousseau, Peter L.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10298; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10298.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Going public (Securities) -- Econometric models.; Interest rates -- Econometric models.
Description: "We study the relation between IPO investment and the rate of interest.  We model the IPO timing decision and show that the implied relation between interest rates and investment is non-monotonic, and the data support the implication.  At low rates of interest firms delay their IPOs.  This happens because during the pre-IPO period the firm forgoes earnings that do not matter as much at low interest rates.  The 1950's and early 1960's, especially, were periods of very low real interest rates, and IPO investment was low, with firms delaying their IPOs significantly.  A qualitative difference seems to exist between investment of IPO-ing firms and the investment of incumbent firms which is decreasing in the interest rate, as neoclassical theory predicts"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/25/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.