Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202649 
Year of Publication: 
2013
Series/Report no.: 
Birmingham Business School Discussion Paper Series No. 2013-05
Publisher: 
University of Birmingham, Birmingham Business School, Birmingham
Abstract: 
We analyse the motives and market valuation of various forms of stock market delisting. We show that firms that delist voluntarily are likely to have come to the market to rebalance their leverage rather than to finance their growth opportunities. During their public life, their leverage remained very high, they could not raise equity capital, and their profitability, growth opportunities, and trading volume declined substantially. Their stock prices decrease significantly on and before the announcement date. These results hold even after controlling for agency, asymmetric information, and liquidity effects, and suggest that firms delist voluntarily when they fail to benefit from listing.
Subjects: 
Small firms
AIM
London Stock Exchange
Leverage
Delisting
IPO
JEL: 
G14
G32
URL of the first edition: 
Creative Commons License: 
cc-by-nc-sa Logo
Document Type: 
Working Paper

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