Abstract

Abstract The decision to go public is one of the most important and least studied questions in corporate finance. Most corporate finance textbooks limit themselves to describing the institutional aspects of this decision, providing only a few remarks on its motivation. The conventional wisdom is that going public is simply a stage in the growth of a company. Although there is some truth in it, this ‘theory’ alone cannot explain the observed pattern of listings. Even in developed capital markets like the United States, some large companies—such as United Parcel Service or Bechtel—are not public.1 In other countries, like Germany and Italy, publicly traded companies are the exceptions rather than the rule, and quite a few private companies are much larger than the average publicly traded company. These cross-sectional and cross-country differences indicate that going public is not a stage that all companies eventually reach, but is a choice.

Keywords

BusinessCorporate financeCapital (architecture)AccountingService (business)Listed companyPublic capitalEconomicsFinanceMarketingPublic economicsPublic fundPublic investment

Affiliated Institutions

Related Publications

I Keeping Good Company

Jonathan Charkham

Abstract It matters to all of us that companies should be governed effectively. The prosperity of many associated with the company-whether directly as managers and employers, or...

1994 308 citations

Publication Info

Year
2002
Type
book-chapter
Pages
3-38
Citations
16
Access
Closed

External Links

View on DOI.org

Social Impact

Altmetric
PlumX Metrics

Social media, news, blog, policy document mentions

Citation Metrics

16
OpenAlex

Cite This

Marco Pagano, Fabio Panetta, Luigi Zingales (2002). Why Do Companies Go Public? An Empirical Analysis. , 3-38. https://doi.org/10.1093/oso/9780199243235.003.0001

Identifiers

DOI
10.1093/oso/9780199243235.003.0001