Going public in the 1980s: Evidence from Sweden

Going public in the 1980s: Evidence from Sweden The paper explores the going public decision in a sample of family‐owned corporations in Sweden, 1970–1991. the issuers' motivations for going public are documented and contrasted with economic theory. We find that the average firm is old, that a significant portion of the shares are sold by existing shareholders, that most going public activity took place after an exceptionally sharp stock price increase, and that going public activity is not related to the business cycle. the findings suggest that firms were taken public by their owners who wanted to liquidate their investment to finance consumption or portfolio diversification. the findings strike the common view that firms go public to finance growth. Data from other European countries exhibit similar patterns and suggest that our findings for Sweden may extend to other markets as well. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Financial Management Wiley

Going public in the 1980s: Evidence from Sweden

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Publisher
Wiley
Copyright
Copyright © 1995 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1354-7798
eISSN
1468-036X
D.O.I.
10.1111/j.1468-036X.1995.tb00021.x
Publisher site
See Article on Publisher Site

Abstract

The paper explores the going public decision in a sample of family‐owned corporations in Sweden, 1970–1991. the issuers' motivations for going public are documented and contrasted with economic theory. We find that the average firm is old, that a significant portion of the shares are sold by existing shareholders, that most going public activity took place after an exceptionally sharp stock price increase, and that going public activity is not related to the business cycle. the findings suggest that firms were taken public by their owners who wanted to liquidate their investment to finance consumption or portfolio diversification. the findings strike the common view that firms go public to finance growth. Data from other European countries exhibit similar patterns and suggest that our findings for Sweden may extend to other markets as well.

Journal

European Financial ManagementWiley

Published: Nov 1, 1995

References

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