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Motives And Effects Of The Initial Public Offerings On The Warsaw Stock Exchange

Author

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  • Tomasz Sosnowski

    (University of Lodz)

Abstract

This paper empirically investigates the links between the motives for going public and changes in the market value and efficiency of new stock companies. Using a sample of 200 firms from Warsaw Stock Exchange between 2005 and 2012 I find that the principal purpose of initial public offering is raising additional capital by the company but divestment grounds of initial shareholders are also important. I find evidence that the sale of secondary shares in the initial public offering may be seen as a negative signal at aftermarket performance of the firm. The data reveal that the most adverse long-term changes in the market value and business efficiency are observed for those companies, where in the initial public offering both primary and secondary shares were sold.

Suggested Citation

  • Tomasz Sosnowski, 2015. "Motives And Effects Of The Initial Public Offerings On The Warsaw Stock Exchange," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(2), pages 207-222, June.
  • Handle: RePEc:pes:ierequ:v:10:y:2015:i:2:p:207-222
    DOI: 10.12775/EQUIL.2015.020
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    Keywords

    initial public offering; primary shares; secondary shares; motives for going public;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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