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IPOs and firms’ financial distress risk: International evidence

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  • Han, Feng
  • Wei, Xiangjing
  • Yang, Yang

Abstract

Analyzing private firms from 64 countries, we observe increased financial distress risk in the years shortly after completing an IPO, a result that is more pronounced in companies exhibiting severe agency conflicts or information asymmetry, as well as in countries where institutional frameworks are weaker. The result remains consistent across different samples and specifications and after accounting for endogeneity. The study underscores that firms are vulnerable to distress after going public and emphasizes the importance of institutional quality in cushioning such risks.

Suggested Citation

  • Han, Feng & Wei, Xiangjing & Yang, Yang, 2026. "IPOs and firms’ financial distress risk: International evidence," Research in International Business and Finance, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:riibaf:v:81:y:2026:i:c:s0275531925004349
    DOI: 10.1016/j.ribaf.2025.103178
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