Impact of legal institutions on IPO survival: A global perspective

Susanne Espenlaub, Abhinav Goyal () and Abdulkadir Mohamed

Journal of Financial Stability, 2016, vol. 25, issue C, 98-112

Abstract: Around the world, investors, practitioners, regulators and policy makers seek to understand whether, when and why recently listed stocks, initial public offerings (IPOs) are delisted rather than continue trading (survive). Using data on 7,627 IPOs issued during 2000–2008 across 32 countries, we explore the impact of the legal system on IPO survival. We find that IPOs in countries with better investor protections remain listed for longer. This suggests that better legal systems increase the net benefits companies derive from staying listed. We also provide evidence that better legal systems increase the effectiveness of IPO certification by venture capitalists, underwriters and auditors.

Keywords: IPO; Delisting; International markets; Legality index; Certification hypothesis (search for similar items in EconPapers)
JEL-codes: F3 G15 G3 K4 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:25:y:2016:i:c:p:98-112

DOI: 10.1016/j.jfs.2016.06.003

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