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Business Creation and the Stock Market

Claudio Michelacci () and Javier Suarez ()

Working Papers from Centro de Estudios Monetarios Y Financieros-

Abstract: We claim that the stock market encourages business creation, innovation, and growth by allowing the recycling of "informed capital". Due to incentive and information problems, new start-ups face high flotation costs. Sustaining a tight relationship with a monitor allows them to postpone their going public decision until profitability prospects are clearer of incentive problems are less severe.

Keywords: GROWTH RATE; MARKET; INFORMATION (search for similar items in EconPapers)
JEL-codes: E44 G32 O40 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2000
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Journal Article: Business Creation and the Stock Market (2004) Downloads
Working Paper: Business Creation and the Stock Market (2002) Downloads
Working Paper: Business Creation and the Stock Market (2000) Downloads
Working Paper: Business Creation and the Stock Market (2000) Downloads
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