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A Note on Firms' Strategic Behaviour During an IPO

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Listed:
  • Pia Weiss

    (Institute for Economic Policy at the University of Cologne)

Abstract

When potential shareholders cannot observe the business conditions of the firms, the latter desiring to acquire capital by an IPO and operating under less favourable business conditions have a strong incentive to appear more successful.

Suggested Citation

  • Pia Weiss, 2002. "A Note on Firms' Strategic Behaviour During an IPO," Microeconomics 0201003, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0201003 Note: Type of Document - Tex; prepared on IBM PC; pages: 6; figures: no
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    File URL: http://econwpa.repec.org/eps/mic/papers/0201/0201003.pdf
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    References listed on IDEAS

    as
    1. Klaus M. Schmidt, 2003. "Convertible Securities and Venture Capital Finance," Journal of Finance, American Finance Association, vol. 58(3), pages 1139-1166, June.
    2. Bergemann, Dirk & Hege, Ulrich, 1998. "Venture capital financing, moral hazard, and learning," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 703-735, August.
    3. Catherine Casamatta, 2003. "Financing and Advising: Optimal Financial Contracts with Venture Capitalists," Journal of Finance, American Finance Association, vol. 58(5), pages 2059-2086, October.
    4. Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
    5. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    6. Cornelli, F. & Yosha, O., 1997. "Stage Financing and the Role of Convertible Debt," Papers 23-97, Tel Aviv.
    7. Cornelli, Francesca & Yosha, Oved, 1997. "Stage Financing and the Role of Convertible Debt," CEPR Discussion Papers 1735, C.E.P.R. Discussion Papers.
    8. Gompers, Paul A., 1998. "Venture capital growing pains: Should the market diet?," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 1089-1104, August.
    9. Trester, Jeffrey J., 1998. "Venture capital contracting under asymmetric information," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 675-699, August.
    10. Berglof, Erik, 1994. "A Control Theory of Venture Capital Finance," Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(2), pages 247-267, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    IPO; asymmetric information; signalling game;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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