Publication detail

Why Do Companies Go Public? Evidence from the Prague Stock Exchange

SKALICKÁ, M. ZINECKER, M. BALCERZAK, A. MELUZÍN, T.

Original Title

Why Do Companies Go Public? Evidence from the Prague Stock Exchange

Type

journal article in Web of Science

Language

English

Original Abstract

Objective: In this article, we intend to contribute evidence in regard to going public motivation on a sample of companies that launched an IPO at the Prague Stock Exchange between 2004 and 2017. Research Design & Methods: In order to evaluate the prevailing motives for the IPO launch, we design and apply a set of composite indicators the values of which may be understood as an indication of the extent to which IPO launch motives originate in the zone of the issuing company's needs or in the zone of interest of its owner (owners). Findings: Our main conclusion is that the dominant going public motivation is to allow current shareholders to cash out and to enhance the company's publicity and image. Implications & Recommendations: Since the study disclosed that the prevailing motive of primary issues at the Prague Stock Exchange was the exit of investors and enhancing publicity and image we suggest that companies launching the Prague Stock Exchange in recent years were predominantly determined by non-financial aspects. Thus, the research findings represent substantial implications for issuers, investment bankers, the stock exchange, and macroeconomic policy makers when the concept of incentive schemes how to increase the attractiveness of the local capital market will be proposed. Contribution & Value Added: Our set of composite indicators allows to assess not only the predominant IPO motive zone, but also measure the intensity of the motives. This helps to understand better the urgency of the needs of the issuing companies satisfied by the IPO implementation.

Keywords

Financial Economics; IPO; Prague Stock Exchange; IPO motivation

Authors

SKALICKÁ, M.; ZINECKER, M.; BALCERZAK, A.; MELUZÍN, T.

Released

19. 3. 2019

Publisher

Cracow University of Economics

Location

Cracow

ISBN

2353-8821

Periodical

Entrepreneurial Business and Economics Review

Year of study

7

Number

1

State

Republic of Poland

Pages from

181

Pages to

199

Pages count

19

URL

https://eber.uek.krakow.pl/index.php/eber/article/view/491

Full text in the Digital Library

http://hdl.handle.net/11012/184649

BibTex

@article{BUT156588,
  author="Martina {Skalická} and Marek {Zinecker} and Adam Przemyslaw {Balcerzak} and Tomáš {Meluzín}",
  title="Why Do Companies Go Public? Evidence from the Prague Stock Exchange",
  journal="Entrepreneurial Business and Economics Review",
  year="2019",
  volume="7",
  number="1",
  pages="181--199",
  doi="10.15678/EBER.2019.070110",
  issn="2353-8821",
  url="https://eber.uek.krakow.pl/index.php/eber/article/view/491"
}