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IPO peer effects
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DOI：10.1016/j.jfineco.2021.05.055.png)
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Abstract
En 中文
This study investigates whether a private firm's decision to go public affects the IPO decisions of its competitors. Using detailed data from the drug development industry, we identify a private firm's direct competitors at a precise level through a novel approach using similarity in drug development projects based on disease targets. The analysis shows that a private firm is significantly more likely to go public after observing the recent IPO of a direct competitor, and this effect is distinct from hot market effects or other common shocks. Furthermore, our effects are centered on firms that operate in more competitive areas. We additionally explore peer effects in private firm funding propensities more broadly, such as through venture capital or being acquired, and find results consistent with a competitive channel. (c) 2021 Elsevier B.V. All rights reserved.
Keywords:
Initial public offerings
IPO Propensity
Peer effects
R&D competition
Information spillovers
Venture capital
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