Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25405 
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dc.contributor.authorBouis, Romainen
dc.date.accessioned2006-07-31-
dc.date.accessioned2009-07-24T13:34:47Z-
dc.date.available2009-07-24T13:34:47Z-
dc.date.issued2003-
dc.identifier.piurn:nbn:de:hebis:30-10511en
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
dc.language.isoengen
dc.publisher|aGoethe University Frankfurt, Center for Financial Studies (CFS) |cFrankfurt a. M.en
dc.relation.ispartofseries|aCFS Working Paper |x2003/47en
dc.subject.jelD92en
dc.subject.jelG10en
dc.subject.jelG24en
dc.subject.jelG31en
dc.subject.ddc330en
dc.subject.keywordIPOen
dc.subject.keyworddivergence of opinionen
dc.subject.keywordreal optionen
dc.subject.keywordventure capitalismen
dc.subject.keywordstock market and high-tech investmenten
dc.subject.stwWertpapieremissionen
dc.subject.stwRisikokapitalen
dc.subject.stwHochtechnologiesektoren
dc.subject.stwSchätzungen
dc.subject.stwTheorieen
dc.subject.stwUSAen
dc.titleIPOs cycle and investment in high-tech industries-
dc.typeWorking Paperen
dc.identifier.ppn383914167en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:cfswop:200347en

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