scholarly journals Conflicting interests: Going public in deteriorating market conditions

2019 ◽  
Vol 16 (3) ◽  
pp. 143-158
Author(s):  
Pengda Fan ◽  
Lin Wang ◽  
Thanh Nguyen Thi Phuong
Keyword(s):  
Sample Selection ◽  
Probit Model ◽  
Venture Capitalists ◽  
Market Conditions ◽  
Going Public ◽  
Conflicting Interests ◽  
Secondary Shares ◽  
Offering Price ◽  
Retained Ownership ◽  
Public Decision

The purpose of this paper is to analyze whether the conflicting interest between issuing firms and CEOs (venture capitalists) affect the going-public decision. Going public in deteriorating market conditions is costly for issuing firms in terms of low offering price and high probability of withdrawal. If agency costs exist, agents pursuing their own interests may bring firms public even in poor market conditions, which has been largely ignored in the previous literature. To examine our hypotheses, we collect 1246 Japanese firms going public from 2001 to 2016 and conduct logit regressions, propensity score matching (PSM) as well as a probit model with sample selection. Consistent with our conjecture, we find a positive relation between the going-public decision and secondary shares offered by CEOs. Additionally, we also find an inverse U-shaped relationship between CEOs’ retained ownership and the going-public decision, indicating that in addition to liquidity needs, private benefits of control is another potential source of conflicting interests. Furthermore, secondary shares offered by VCs are also positively associated with the going-public decision, suggesting that when VCs attempt to exit as rapidly as possible, they are more likely to bring firms public even in deteriorating markets. These findings suggest that conflicting interests among parties affect the timing and costs of IPOs.

Going public in Mexico

2018 ◽  
Vol 31 (1) ◽  
pp. 156-176
Author(s):  
María de las Mercedes Adamúz ◽  
José Luis Rivas
Keyword(s):  
Initial Public Offerings ◽  
Design Methodology ◽  
Probit Model ◽  
International Literature ◽  
Market Conditions ◽  
Going Public ◽  
Public Companies ◽  
Content Type ◽  
Public Offerings ◽  
Private And Public

Purpose The purpose of this paper is to examine the factors that affect the likelihood of being public using a comprehensive database of private and public companies in Mexico, from all sectors, during 2006-2014. Design/methodology/approach The authors estimate a longitudinal probit model to identify the ex ante characteristics of public Mexican firms that differentiate them from those Mexican firms that continue to remain private. Findings The authors find that larger, younger and less levered Mexican firms are more likely to be public in Mexico. They additionally test the influence of market conditions and location on the probability of being public. They find that location matters but they find no evidence that initial public offerings (IPOs) are driven by favorable Mexican market conditions. Originality/value This paper contributes to the Mexican and international literature on IPOs because it uses an original database built from information of private and public Mexican firms. The study contributes to a better understanding of the determinants of the decision of going public in Mexico.

Local IPO waves, local shocks, and the going public decision

2021 ◽  
Author(s):  
Giulia Baschieri ◽  
Andrea Carosi ◽  
Stefano Mengoli
Keyword(s):  
Going Public ◽  
Public Decision

The Law and Economics of the Going-Public Decision

2018 ◽  
pp. 26-51 ◽  
Author(s):  
Jay B. Kesten
Keyword(s):  
Initial Public Offering ◽  
Law And Economics ◽  
Turn Of The Millennium ◽  
Going Public ◽  
Public Offerings ◽  
Secular Decline ◽  
The Law ◽  
Public Offering ◽  
Macroeconomic Determinants ◽  
Public Decision

An initial public offering (IPO) is one of the most important events in the life cycle of a developing firm. The decision to “go public,” however, is complicated by the persistently cyclical market for public offerings. This chapter analyzes the macroeconomic determinants of IPO market cyclicality alongside the strategic and corporate governance considerations faced by private firms, arising from the costs and benefits of going public. The law and economics of the going-public decision also are relevant to the secular decline in IPOs since the turn of the millennium. This chapter evaluates several competing and complementary hypotheses that attempt to explain this phenomenon, each of which relies at least in part on the various features of the going-public decision-making process.

State legitimacy and tax compliance among small and medium scale enterprises: a case study of Dodowa district, Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abraham Gyamfi Ababio ◽  
Arthur Gnonsio Mangueye
Keyword(s):  
Sample Selection ◽  
Tax Compliance ◽  
Probit Model ◽  
Content Type ◽  
Medium Scale ◽  
State Legitimacy ◽  
Negative Effect ◽  
Sizable Proportion

Purpose Improving tax compliance would drive the needed development in Ghana. Small and medium scale enterprises (SME) constitute a sizable proportion of the Ghanaian economy but its contribution to tax revenue is below expectation. This study aims to determine whether SME's perception of state legitimacy affects tax compliance. Design/methodology/approach A structured questionnaire was administered to 200 SMEs randomly drawn from Dodowa in the Shai-Osudoku District of Greater Accra Region. Descriptive statistics and the Probit model with sample selection were used to analyse the data. Findings The study found that SME's perception of government legitimacy exerts a significant negative effect on reducing profit to avoid tax liability (ß = −0.0305, p < 0.05). Other factors such as education and fear of fines and penalties were also found to reduce the likelihood that the firm would reduce profit to avoid high tax liability. Still, tax knowledge had a positive effect on this behaviour. Practical implications This study would help deepen policymakers' knowledge of how to improve tax compliance among SMEs in Ghana. Originality/value The originality of this work is that it explicitly models the role of fiscal exchange theory in explaining tax compliance among SMEs in Ghana by using robust methodology.

scholarly journals Role Of Underwriters In Restraining Earnings Management In Initial Public Offerings

2012 ◽  
Vol 28 (4) ◽  
pp. 709 ◽  
Author(s):  
Hei Wai Lee ◽  
Yan Alice Xie ◽  
Jian Zhou
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
The Internet ◽  
Venture Capitalists ◽  
Font Size ◽  
Going Public ◽  
Public Offerings ◽  
Investment Bankers ◽  
Sarbanes Oxley

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">We investigate the </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">relationship</span><span style="font-size: 10pt;"> between underwriter</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> reputation</span><span style="font-size: 10pt;"> and earnings management of IPO firms over the period of 1991-2005. We find that </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">IPO firms engage in less earnings management</span><span style="font-size: 10pt;"> if </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">they</span><span style="font-size: 10pt;"> are underwritten by prestigious investment bankers. Furthermore, the role of prestigious underwriters in restraining earnings management of IPO issuers do not change during the Internet Bubble period or after the passage of the Sarbanes-Oxley Act (SOX). The findings support the certification role of underwriters in the IPO process.<span style="mso-spacerun: yes;"> </span>We also document that</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> firms going public in the post-SOX period engage in less earnings management compared to firms going public in the pre-SOX period</span><span style="font-size: 10pt;">. Further findings suggest that the changing objectives of venture capitalists may explain the reduction in the level of earnings management of IPO firms following the passage of SOX.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

scholarly journals Analyzing Determining Factors of Young Graduates’ Decision to Stay in Lagged Regions

2020 ◽  
Vol 12 (8) ◽  
pp. 3094 ◽  
Author(s):  
Youngjin Woo ◽  
Euijune Kim
Keyword(s):  
College Graduates ◽  
High School Graduates ◽  
Sample Selection ◽  
Probit Model ◽  
Spatial Choice ◽  
Bivariate Probit Model ◽  
Determining Factors ◽  
Home Village ◽  
Decision To Stay

This study identifies what factors have effects on college graduates’ decisions to stay for jobs in lagged regions using a bivariate probit model with sample selection. The results show that strong preferences for a home village and a university region contribute to the decision about job location concerning the regions. In addition, low living costs have much significant impact on spatial choice compared with economic factors, such as the levels of wage and job security. The long-term economic growth of lagged regions could be affected by a preference of high-school graduates to attend local universities.

Was it worth it? An empirical analysis of over-education among PhD recipients in Italy

2015 ◽  
Vol 42 (3) ◽  
pp. 222-238 ◽  
Author(s):  
Giuseppe Lucio Gaeta
Keyword(s):  
Empirical Analysis ◽  
Sample Selection ◽  
Probit Model ◽  
Empirical Examination ◽  
Doctoral Graduates ◽  
Content Type ◽  
Factors Associated ◽  
Bivariate Probit Model ◽  
Subjective Evaluations ◽  
Econometric Analyses

Purpose – The purpose of this paper is to provide an empirical examination of factors associated with over-education among PhD graduates in Italy. Design/methodology/approach – The investigation is based on recently released data collected by the Italian National Institute of Statistics by means of interviews with a large sample of PhD recipients, carried out a few years after they obtained their PhD degree. The author measured the mismatch between the current job and previous PhD studies using two direct subjective evaluations of over-education, which distinguish between the usefulness of the PhD title to get the current job position and to perform the current work activities. Even if the incidence of over-education varies according to the measurement applied, the author found that it is highly widespread among PhD recipients. The econometric analyses are aimed at identifying factors associated with over-education and are based on the standard probit model and the bivariate probit model with sample selection which allows to control for self selection into employment. Findings – The results show that over-education is significantly correlated with: first, a number of PhD-related variables, such as the scientific field of study, having attended courses or visiting periods abroad; second, some job-related characteristics, such as working in the academia or being mainly involved in research-related activities; third, the channel of access to the job; and fourth, residential location. Originality/value – This paper contributes to the literature focusing on job-education mismatch by providing, to the best of the author’s knowledge, the first empirical analysis of over-education among PhD recipients in Italy; moreover, it provides some useful insights to evaluate the professional doctoral graduates in Italy.

A Theory of the Going-Public Decision

1999 ◽  
Vol 12 (2) ◽  
pp. 249-279 ◽  
Author(s):  
Thomas J. Chemmanur ◽  
Paolo Fulghieri
Keyword(s):  
Going Public ◽  
Public Decision
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