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The valuation of IPOs in the European legal framework


  • Michele Meoli


  • Stefano Paleari


  • Silvio Vismara



We question whether an evolution in the national legal system leads to higher valuations for companies going public. We investigate this issue with reference to the population of firms going public on the main and second stock markets in the three largest economies of Continental Europe over the last fifteen years (1995-2009). We use a new dynamic measure of the evolution of the legal framework, defined as the compliance record of the Member States of the European Union. Controlling for the nature of the firm as well as for the identity of the ultimate shareholder, we find that an increase in the annual number of infringements is related to a decrease in the valuation of the firms going public. Therefore, we conclude that a higher evolution of the legal system leads to higher valuations of firms.

Suggested Citation

  • Michele Meoli & Stefano Paleari & Silvio Vismara, 2010. "The valuation of IPOs in the European legal framework," Working Papers 1001, Department of Economics and Technology Management, University of Bergamo.
  • Handle: RePEc:brh:wpaper:1001

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    Cited by:

    1. Wolfgang Bessler & Martin Seim, 2013. "Venture capital and IPO waves in Europe: an analysis of firm and performance characteristics," Chapters,in: Handbook of Research on IPOs, chapter 15, pages 295-326 Edward Elgar Publishing.

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