Going Public to Grow? Evidence from a Panel of Italian Firms

Robert Carpenter () and Laura Rondi

Small Business Economics, 2006, vol. 27, issue 4, 387-407

Abstract: This paper investigates the consequences of the decision to go public for the growth of Italian firms using US firms as a benchmark for comparison. We find Italian firms conducting IPOs are larger than US firms, but raise fewer funds from the IPO and grow more slowly afterwards. We also compare Italian IPOs across time. Firms going public in the 1990s display features that are more similar to US IPOs. We describe changes to the Italian economy and financial markets that are potentially responsible for the change. We compare firms of different size and with different governance structures, and we find that they behave differently after going public. Our results suggest that going public does not guarantee faster growth or more jobs. As such, public policies that simply increase access to equity markets may not be effective unless they provide incentives for the firms’ decision-makers to use the new capital to grow. Copyright Springer 2006

Keywords: initial public offerings; going public; firm growth; business groups and small firms; Italian stock markets; G30; G32; L21; O16 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (19)

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Working Paper: GOING PUBLIC TO GROW? EVIDENCE FROM A PANEL OF ITALIAN FIRMS (2004)
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DOI: 10.1007/s11187-005-4323-3

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