Anti-collusion leniency legislations and IPO activity: Worldwide evidence

Huu Nhan Duong, Abhinav Goyal and Leon Zolotoy

Journal of Corporate Finance, 2024, vol. 89, issue C

Abstract: We study the impact of the staggered adoption of anti-collusion leniency legislations around the world on IPO activity. We document that the passage of leniency legislations prompts IPO activity. The effect is amplified in more concentrated industries, while it is mitigated in countries with more stringent competition laws in place and countries in which investors have a lower ability to diversify risk in the financial market. Collectively, these findings are consistent with the view that, by enhancing product market competition, leniency legislations increase the benefits for firms from going public, resulting in higher IPO activity. The results of supplemental analyses suggest that the passage of leniency legislations leads to less underpriced IPOs and a more efficient use of IPO proceeds, and prompts firms with less proprietary information to go public.

Keywords: Leniency legislations; IPO activity; Product market competition (search for similar items in EconPapers)
JEL-codes: G15 G18 G30 G32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:89:y:2024:i:c:s0929119924001536

DOI: 10.1016/j.jcorpfin.2024.102691

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