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The Going Public Decision and the Structure of Equity Markets

  • Astudillo, Alfonso
  • Braun, Matias
  • Castaneda, Pablo

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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File URL: http://mpra.ub.uni-muenchen.de/38640/1/MPRA_paper_38640.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38640.

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Date of creation: 31 Jun 2011
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Publication status: Published in journal of international money and finance 30.7(2011): pp. 1451-1470
Handle: RePEc:pra:mprapa:38640
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  7. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
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