The creation and evolution of entrepreneurial public markets
2019; Elsevier BV; Volume: 136; Issue: 2 Linguagem: Inglês
10.1016/j.jfineco.2019.10.002
ISSN1879-2774
AutoresShai Bernstein, Abhishek Dev, Josh Lerner,
Tópico(s)Firm Innovation and Growth
ResumoThis paper explores the creation and evolution of new stock exchanges around the world geared toward entrepreneurial companies, known as second-tier exchanges. Using hand-collected novel data, we show the proliferation of these exchanges in many countries, their significant volume of Initial Public Offerings (IPOs), and lower listing requirements. Shareholder protection strongly predicted exchange success, even in countries with high levels of venture capital activity, patenting, and financial market development. Better shareholder protection allowed younger, less-profitable, but faster-growing, companies to raise more capital. These results highlight the importance of institutions in enabling the provision of entrepreneurial capital to young companies.
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