The creation and evolution of entrepreneurial public markets

Shai Bernstein, Abhishek Dev and Josh Lerner

Journal of Financial Economics, 2020, vol. 136, issue 2, 307-329

Abstract: This paper explores the creation and evolution of new stock exchanges around the world geared toward entrepreneurial companies, known as second-tier exchanges. Using hand-collected novel data, we show the proliferation of these exchanges in many countries, their significant volume of Initial Public Offerings (IPOs), and lower listing requirements. Shareholder protection strongly predicted exchange success, even in countries with high levels of venture capital activity, patenting, and financial market development. Better shareholder protection allowed younger, less-profitable, but faster-growing, companies to raise more capital. These results highlight the importance of institutions in enabling the provision of entrepreneurial capital to young companies.

Keywords: Initial public offering; Venture capital; Innovation; Start-up (search for similar items in EconPapers)
JEL-codes: G24 G28 L26 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: The Creation and Evolution of Entrepreneurial Public Markets (2018)
Working Paper: The Creation and Evolution of Entrepreneurial Public Markets (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:136:y:2020:i:2:p:307-329

DOI: 10.1016/j.jfineco.2019.10.002

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