The Creation and Evolution of Entrepreneurial Public Markets

Shai Bernstein, Abhishek Dev and Josh Lerner
Additional contact information
Shai Bernstein: Stanford University

Research Papers from Stanford University, Graduate School of Business

Abstract: This paper explores the creation and evolution of new stock exchanges around the world geared towards entrepreneurial companies, known as second-tier exchanges. Using hand-collected novel data, we document the proliferation of these new stock exchanges that were created in a large number of countries, attracted a significant volume of global IPOs, were introduced fairly cyclically, and had lower listing requirements when compared to first-tier stock exchanges. We find that increases in demand for entrepreneurial capital--as proxied for by patenting, IPOs, and stock market valuations--led to a higher likelihood of the introduction of second-tier exchanges. We find no evidence that new second-tier exchanges diverted the existing flow of IPOs from established stock exchanges. Shareholder protection strongly predicted exchange success, even in countries with high levels of venture capital activity, patenting, and financial market development. Second-tier exchanges in countries with better shareholder protection allowed younger, less profitable, but faster-growing companies to raise more capital. These results highlight the importance of institutions in enabling the provision of entrepreneurial capital to young companies.

Date: 2018-12
New Economics Papers: this item is included in nep-ent
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.gsb.stanford.edu/gsb-cmis/gsb-cmis-download-auth/473926
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: The creation and evolution of entrepreneurial public markets (2020)
Working Paper: The Creation and Evolution of Entrepreneurial Public Markets (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3759

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().