Informational Externalities of Going Public Decisions

In this dissertation I examine the informational externalities of going public decisions for industrial and banking sector. The results show that industrial rivals have positive valuation effects only in response to venture backed IPOs and no significant reaction in response to non-venture backed IPOs. I also find evidence that the effect on rival firms is stronger if they operate in low concentrated industries (i.e. high competition) and have low growth opportunities. The relative size of IPO firm seems to play an important role in the direction and magnitude of industry rivals' valuation effects. Negative information revealed in the form of downward price revisions adversely affect rival firms' valuation. Positive information is also conveyed at the IPO announcements in banking industry. Bank rivals experience wealth gains if they are headquartered in the same state and no valuation effects if they are headquartered in the same region as the announcing bank. However, positive and significant reactions are noted in Mid-Atlantic and Southwest regions and negative reaction in Midwest region. Overall, these findings confirm that IPOs convey valuable information to the market and investors use this information to reassess the value of the rival firms.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics and Finance

Year

2004

Author dc:creator

• Cotei, Carmen

Contributors dc:contributor

• Mukherjee, Tarun
• Whitney, Gerald
• Varela, Oscar

• Initial public offerings
• Intra-industry information transfer

Repository record dc:identifier

https://scholarworks.uno.edu/td/1038

OAI identifier oai:identifier

oai:scholarworks.uno.edu:td-2019