Do Public Firms Respond to Industry Opportunities More Than Private Firms? The Impact of Initial Firm Quality

Vojislav Maksimovic, Gordon Phillips and Liu Yang

No 25634, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We track firms at birth and compare the growth pattern of IPO firms and their birth-matched counterparts. Firms that are larger at birth with faster initial growth are more likely to attain a larger size later in life and go public. Firms in the top percentile of predicted propensity to go public grow 29 times larger fifteen years later than matched firms if they actually become public, and 14 times larger if they stay private, showing a large selection effect. We show that public firms, and especially those public firms backed by venture capital, respond more to demand shocks post-IPO.

JEL-codes: G20 G24 G3 G32 L1 L22 L23 L25 L26 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-cfn, nep-com, nep-ent, nep-ind and nep-sbm
Note: CF IO
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Citations: View citations in EconPapers (4)

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