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The strategy of going public: How UK firms choose their listing contracts

Goergen, Marc, Khurshed, Arif and Mudambi, R. 2006. The strategy of going public: How UK firms choose their listing contracts. Journal of Business Finance & Accounting 33 (1-2) , pp. 79-101. 10.1111/j.1468-5957.2006.00657.x

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UK firms going public have a choice between public offers and placings. This choice has important implications in terms of who bears the risk of the issue failing and of its costs. We find that firms with higher ex ante uncertainty choose a placing contract. Highly reputable sponsors and creditor screening serve as signals of firm quality, enabling such firms to choose a public offer. Large and multinational firms usually choose a public offer whereas there is some evidence that very small issues choose a placing. Finally, the ‘hotness’ of the IPO market increases the probability of placings.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
Uncontrolled Keywords: IPOs; listing contracts; placings; public offers; sponsors; certification; signalling
Publisher: Wiley-Blackwell
ISSN: 1468-5957
Last Modified: 04 Jun 2017 04:22

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