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The going public decision and the structure of equity markets

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  • Astudillo, Alfonso
  • Braun, Matías
  • Castañeda, Pablo

Abstract

The industries in which listed firms are concentrated in less developed equity markets are not random, nor entirely explained by the underlying composition of production. Listed firms and market capitalization are disproportionately concentrated in industries with low beta (measured with their beta with the market portfolio in the U.S.). We document a strong positive relationship between the industry-weighted country beta and the degree of market development across countries. Recent IPO activity confirms the result since new listings have higher betas than the average firm already in the market.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 30 (2011)
Issue (Month): 7 ()
Pages: 1451-1470

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Handle: RePEc:eee:jimfin:v:30:y:2011:i:7:p:1451-1470

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Web page: http://www.elsevier.com/locate/inca/30443

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Keywords: Risk sharing; Development of financial markets; Composition of equity markets;

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Cited by:
  1. Gupta, Manu & Prakash, Puneet & Rangan, Nanda K., 2013. "Equity issue-specific versus broad regulatory protections against expropriation risk: International evidence from SEOs," Journal of International Money and Finance, Elsevier, vol. 35(C), pages 146-166.

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