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Going public in the 1980s: Evidence from Sweden

Author

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  • Kristian Rydqvist
  • Kenneth Högholm
Abstract
The paper explores the going public decision in a sample of family‐owned corporations in Sweden, 1970–1991. the issuers' motivations for going public are documented and contrasted with economic theory. We find that the average firm is old, that a significant portion of the shares are sold by existing shareholders, that most going public activity took place after an exceptionally sharp stock price increase, and that going public activity is not related to the business cycle. the findings suggest that firms were taken public by their owners who wanted to liquidate their investment to finance consumption or portfolio diversification. the findings strike the common view that firms go public to finance growth. Data from other European countries exhibit similar patterns and suggest that our findings for Sweden may extend to other markets as well.

Suggested Citation

  • Kristian Rydqvist & Kenneth Högholm, 1995. "Going public in the 1980s: Evidence from Sweden," European Financial Management, European Financial Management Association, vol. 1(3), pages 287-315, November.
    • Handle: RePEc:bla:eufman:v:1:y:1995:i:3:p:287-315
    DOI: 10.1111/j.1468-036X.1995.tb00021.x
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    File URL: https://doi.org/10.1111/j.1468-036X.1995.tb00021.x
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    References listed on IDEAS

    as
    1. Masulis, Ronald W. & Korwar, Ashok N., 1986. "Seasoned equity offerings : An empirical investigation," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 91-118.
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    3. Loughran, Tim & Ritter, Jay R. & Rydqvist, Kristian, 1995. "Initial public offerings: International insights," Pacific-Basin Finance Journal, Elsevier, vol. 3(1), pages 139-140, May.
    4. Lucas, Deborah J & McDonald, Robert L, 1990. "Equity Issues and Stock Price Dynamics," Journal of Finance, American Finance Association, vol. 45(4), pages 1019-1043, September.
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    7. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-387, May.
    8. repec:bla:jfinan:v:44:y:1989:i:2:p:421-49 is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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