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Macroeconomic uncertainty, the option to wait and IPO issue cycles

Binh Nguyen Thanh ()

Finance Research Letters, 2020, vol. 32, issue C

Abstract: This paper uses the macroeconomic uncertainty measure proposed by Jurado, Ludvigson, and Ng (2015) to explain the U.S. Initial Public Offering (IPO) issue cycles. Controlling for a large set of variables, time series estimations reveal a strong and robust negative impact of macroeconomic uncertainty on the IPO activity. An increase in macroeconomic uncertainty by one standard deviation lowers the number of monthly IPOs by roughly four in the long-run. Both the reduction of the number of IPO filings and the rise of withdrawn IPOs contribute to the lower number of IPOs in response to an uncertainty shock

Keywords: Macroeconomic uncertainty; IPO issue cycles; Hot and cold markets; Real options effect (search for similar items in EconPapers)
JEL-codes: E44 G32 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:32:y:2020:i:c:s1544612318303854

DOI: 10.1016/j.frl.2019.01.012

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