Lemons or Cherries? Growth Opportunities and Market Temptations in Going Public and Private

@inproceedings{Aslan2011LemonsOC,
  title={Lemons or Cherries? Growth Opportunities and Market Temptations in Going Public and Private},
  author={Hadiye Aslan and Praveen Kumar},
  year={2011}
}
Is the decision to go public or private a stock-market-driven “sideshow” or does it have significant effects on investment and profitability? We address this issue using a comprehensive data set of private and public companies in the U.K. during 1996–2006. Firms with high investment-financing needs, lower information-production costs, and high industry market-to-book ratios are more likely to go public. In contrast to the literature, we find that capital investment and profitability increase… CONTINUE READING

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