Modeling the Time to an Initial Public Offering: When does the Fruit Ripen?Yamin S Ahmad and Russ D. Kashian Working Papers from UW-Whitewater, Department of Economics Abstract: This paper investigates the characteristics possessed by credit unions who have converted to mutual savings institutions, which might lead them to demutualize and become publicly traded banks. We adopt a duration model framework to examine these characteristics. Our key findings are as follows. First, we find evidence of positive duration dependence in the data we examine. Second, we find that the hazard of an IPO issue increases in two waves. The first occurs between three and a half to four years reflecting the increased transition intensity for those who wish to demutualize early. However, the majority of the institutions in our sample do so by approximately eight years after conversion, and this is where the second spike in the hazard occurs. Finally, upon estimating the model with Cox’s (1975) semi-parametric partial likelihood approach, we find the probability that a converted institution will issue an IPO is influenced to a large extent by various measures that capture asset quality, in particular through measures that are equity driven. However, contrary to what one might expect, we find that total assets do not appear to influence the hazard rate. Keywords: Credit Unions; Demutualization; Hazard Analysis; IPO (search for similar items in EconPapers) Forthcoming, Journal of Economics and Finance Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:uww:wpaper:08-01 Access Statistics for this paper More papers in Working Papers from UW-Whitewater, Department of Economics |
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