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dc.contributor.authorBouis, Romainen_US
dc.date.accessioned2006-07-31en_US
dc.date.accessioned2009-07-24T13:34:47Z-
dc.date.available2009-07-24T13:34:47Z-
dc.date.issued2003en_US
dc.identifier.piurn:nbn:de:hebis:30-10511-
dc.identifier.urihttp://hdl.handle.net/10419/25405-
dc.description.abstractThis paper analyses the effects of the Initial Public Offering (IPO) market on real investment decisions in emerging industries. We first propose a model of IPO timing based on divergence of opinion among investors and short-sale constraints. Using a real option approach, we show that firms are more likely to go public when the ratio of overvaluation over profits is high, that is after stock market run-ups. Because initial returns increase with the demand from optimistic investors at the time of the offer, the model provides an explanation for the observed positive causality between average initial returns and IPO volume. Second, we discuss the possibility of real overinvestment in high-tech industries. We claim that investing in the industry gives agents an option to sell the project on the stock market at an overvalued price enabling then the financing of positive NPV projects which would not be undertaken otherwise. It is shown that the IPO market can however also lead to overinvestment in new industries. Finally, we present some econometric results supporting the idea that funds committed to the financing of high-tech industries may respond positively to optimistic stock market valuations.en_US
dc.language.isoengen_US
dc.publisherCenter for Financial Studies Frankfurt, Mainen_US
dc.relation.ispartofseriesCFS Working Paper 2003/47en_US
dc.subject.jelD92en_US
dc.subject.jelG10en_US
dc.subject.jelG24en_US
dc.subject.jelG31en_US
dc.subject.ddc330en_US
dc.subject.keywordIPOen_US
dc.subject.keyworddivergence of opinionen_US
dc.subject.keywordreal optionen_US
dc.subject.keywordventure capitalismen_US
dc.subject.keywordstock market and high-tech investmenten_US
dc.subject.stwWertpapieremissionen_US
dc.subject.stwRisikokapitalen_US
dc.subject.stwHochtechnologiesektoren_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwUSAen_US
dc.titleIPOs cycle and investment in high-tech industriesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn383914167en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:cfswop:200347-
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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