European IPO Markets: The Post-Issue Performance Imperative

Benoît F. Leleux and Daniel F. Muzyka

Entrepreneurship Theory and Practice, 1997, vol. 21, issue 4, 111-118

Abstract: European secondary markets appear to have so far failed as providers of capital for emerging growth companies. Conventional explanations focus on the supply side of the market, blaming over-regulation, complex listing requirements, the absence of an equity culture, weak competition between national markets, and a shortage of growth companies. This paper highlights significant underperformance in long-term IPO returns in European markets, possibly affecting demand by Investors. Alternative demand-side factors, such as constraints on Institutional investments in small cap stocks and the consequent lack of supporting analysts, and methodological Issues in measuring long-term performance, are also discussed.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:21:y:1997:i:4:p:111-118

DOI: 10.1177/104225879702100408

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