Credit crunch and timing of initial public offerings

Pengda Fan, Konari Uchida

Research output: Contribution to journalArticlepeer-review

Abstract

We find that firms with more outstanding short-term debt are more likely to go public in bear markets than firms with less short-term debt. Importantly, this finding is evident for firms going public after a reduction of total bank credits in the loan market. Bear market IPOs repay more short-term debt during the IPO year than other IPOs do, and have lower offering prices and proceeds. These results suggest a credit crunch significantly affects the timing and costs of IPOs when firms owe significant short-term debt.

Original languageEnglish
Pages (from-to)22-39
Number of pages18
JournalPacific Basin Finance Journal
Volume53
DOIs
Publication statusPublished - Feb 2019

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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