Informing Entrepreneurs: Public Corporate Disclosure and New Business Formation

John Barrios, Jung Ho Choi, Yael V. Hochberg, Jinhwan Kim and Miao Liu ()
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Yael V. Hochberg: Rice U
Jinhwan Kim: Stanford U

Research Papers from Stanford University, Graduate School of Business

Abstract: We examine the relationship between public firm disclosure and aggregate new business formation. Consistent with the notion that public company disclosures provide information spillovers that reduce the extent of uncertainty about new investment opportunities, we find that increased public firm presence is positively associated with new business formation in an industry. Furthermore, using plausibly exogenous information shocks generated by new IPOs in a geographic area, we find that post-IPO, new business registration in the public company's geographic area rise by 4 to 10%, consistent with soft information channels serving to reinforce hard information in public disclosures. New IPOs are associated with significant increases in Edgar downloading activity in the IPOs' geographic area, consistent with the notion that public firm disclosures are providing important investment opportunity information that facilitates new business formation.

JEL-codes: D80 D81 D83 L26 M41 (search for similar items in EconPapers)
Date: 2020-11
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Working Paper: Informing Entrepreneurs: Public Corporate Disclosure and New Business Formation (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3917

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