The Going Public Decision and the Structure of Equity Markets

Astudillo, Alfonso and Braun, Matias and Castaneda, Pablo (2011): The Going Public Decision and the Structure of Equity Markets. Published in: journal of international money and finance , Vol. 7, No. 30 (November 2011): pp. 1451-1470.

Abstract

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Risk Sharing, Development of Financial Markets, Composition of Equity Markets
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

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