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Dissecting the listing gap: Mergers, private equity, or regulation?

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  • Lattanzio, Gabriele
  • Megginson, William L.
  • Sanati, Ali

Abstract

The abnormal decline in the number of U.S. public firms is often blamed on merger activity, private equity investments, and stock market regulations. We compare the effects of these channels in a unified framework. In the U.S., an extra 100 mergers is associated with 22.01 additional missing public firms, whereas an extra 100 PE deals is associated with 3.62 fewer missing public firms. Regulatory changes contribute to the decline of U.S. listings too. We also specify the types of deals that most strongly affect listings. Finally, we document that similar listing gaps emerge in other developed economies.

Suggested Citation

  • Lattanzio, Gabriele & Megginson, William L. & Sanati, Ali, 2023. "Dissecting the listing gap: Mergers, private equity, or regulation?," Journal of Financial Markets, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:finmar:v:65:y:2023:i:c:s1386418123000344
    DOI: 10.1016/j.finmar.2023.100836
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    More about this item

    Keywords

    Stock listings; Mergers and acquisitions; Private equity; Securities regulation; Sarbanes–Oxley Act; Compliance cost; International financial markets;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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