What influences a bank’s decision to go public?

Sermpinis, G. , Tsoukas, S. and Zhang, P. (2019) What influences a bank’s decision to go public? International Journal of Finance and Economics, 24(4), pp. 1464-1485. (doi:10.1002/ijfe.1740)

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Abstract

A bank's decision to go public by issuing an Initial Public Offering (IPO) transforms its operations and capital structure. Much of the empirical investigation in this area focuses on the determinants of the IPO decision, applying accounting ratios and other publicly available information in nonlinear models. We mark a break with this literature by offering methodological extensions and an extensive and updated U.S. dataset to predict bank IPOs. Combining the least absolute shrinkage and selection operator with a Cox proportional hazard, we uncover value in several financial factors as well as market‐driven and macroeconomic variables in predicting a bank's decision to go public. Importantly, we document a significant improvement in the model's predictive ability compared with standard frameworks used in the literature. Finally, we show that the sensitivity of a bank's IPO to financial characteristics is higher during periods of global financial crisis than in calmer times.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Zhang, Miss Ping and Tsoukas, Professor Serafeim and Sermpinis, Professor Georgios
Authors: Sermpinis, G., Tsoukas, S., and Zhang, P.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
College of Social Sciences > Adam Smith Business School > Economics
Journal Name:International Journal of Finance and Economics
Publisher:Wiley
ISSN:1076-9307
ISSN (Online):1099-1158
Published Online:26 August 2019
Copyright Holders:Copyright © 2019 John Wiley and Sons, Ltd.
First Published:First published in International Journal of Finance and Economics 24(4):1464-1485
Publisher Policy:Reproduced in accordance with the publisher copyright policy

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