Marketability Discount in Various Economic Environments. Comparison of Developed and Emerging Markets on the Example of the USA and Poland

Radosław Pastusiak, Jakub Keller and Michał Radke
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Radosław Pastusiak: Department of Corporate finance, University of Lodz, 90-412 Lodz, Poland
Jakub Keller: Department of Corporate finance, University of Lodz, 90-412 Lodz, Poland
Michał Radke: Department of Corporate finance, University of Lodz, 90-412 Lodz, Poland

JRFM, 2020, vol. 13, issue 6, 1-15

Abstract: The aim of the presented article is to compare and evaluate the occurrence and level of marketability discount in developed and emerging markets in the example of the United States of America (USA) and Poland. According to the hypothesis put forward in the article, due to the smaller degree of development and depth of emerging markets, the marketability discount obtained in the context of the initial public offering (IPO) is lesser in its extent, as compared to the case when the IPO takes place in the developed market. The authors have made a statistic and econometric analysis based on a sample of nearly 200 IPOs in Poland and 1200 IPOs in the USA. The study used an analysis of the statistical differences between the groups ( t -test), and also a linear modelling of the determinants of liquidity discount volume. The obtained results show that the stated hypothesis was correct, and that there are significant differences between the studied markets in reference to the marketability discount. The authors also concluded that the discount is not related to the condition of the company.

Keywords: company valuation; pricing; marketability discount; stock comparison; IPO (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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