The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision

Michael Dambra; Laura Casares Field; Matthew T. Gustafson

doi:10.1016/j.jfineco.2014.11.012

The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision

Michael Dambra, Laura Casares Field, Matthew T. Gustafson

Finance

Research output: Contribution to journal › Article › peer-review

89 Scopus citations

Abstract

In April 2012, the Jumpstart Our Business Startups Act (JOBS Act) was enacted to help revitalize the initial public offering (IPO) market, especially for small firms. During the year ending March 2014, IPO volume and the proportion of small firm issuers was the largest since 2000. Controlling for market conditions, we estimate that the JOBS Act has led to 21 additional IPOs annually, a 25% increase over pre-JOBS levels. Firms with high proprietary disclosure costs, such as biotechnology and pharmaceutical firms, increase IPO activity the most. These firms are also more likely to take advantage of the act's de-risking provisions, allowing firms to file the IPO confidentially while testing-the-waters.

Original language	English (US)
Pages (from-to)	121-143
Number of pages	23
Journal	Journal of Financial Economics
Volume	116
Issue number	1
DOIs	https://doi.org/10.1016/j.jfineco.2014.11.012
State	Published - Apr 1 2015

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics
Strategy and Management

Access to Document

10.1016/j.jfineco.2014.11.012

Cite this

@article{cdfb7d72336f4945ba39e15e06008cde,

title = "The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision",

abstract = "In April 2012, the Jumpstart Our Business Startups Act (JOBS Act) was enacted to help revitalize the initial public offering (IPO) market, especially for small firms. During the year ending March 2014, IPO volume and the proportion of small firm issuers was the largest since 2000. Controlling for market conditions, we estimate that the JOBS Act has led to 21 additional IPOs annually, a 25% increase over pre-JOBS levels. Firms with high proprietary disclosure costs, such as biotechnology and pharmaceutical firms, increase IPO activity the most. These firms are also more likely to take advantage of the act's de-risking provisions, allowing firms to file the IPO confidentially while testing-the-waters.",

author = "Michael Dambra and Field, {Laura Casares} and Gustafson, {Matthew T.}",

note = "Publisher Copyright: {\textcopyright} 2014 Elsevier B.V.",

year = "2015",

month = apr,

day = "1",

doi = "10.1016/j.jfineco.2014.11.012",

language = "English (US)",

volume = "116",

pages = "121--143",

journal = "Journal of Financial Economics",

issn = "0304-405X",

publisher = "Elsevier",

number = "1",

}

TY - JOUR

T1 - The JOBS Act and IPO volume

T2 - Evidence that disclosure costs affect the IPO decision

AU - Dambra, Michael

AU - Field, Laura Casares

AU - Gustafson, Matthew T.

PY - 2015/4/1

Y1 - 2015/4/1

N2 - In April 2012, the Jumpstart Our Business Startups Act (JOBS Act) was enacted to help revitalize the initial public offering (IPO) market, especially for small firms. During the year ending March 2014, IPO volume and the proportion of small firm issuers was the largest since 2000. Controlling for market conditions, we estimate that the JOBS Act has led to 21 additional IPOs annually, a 25% increase over pre-JOBS levels. Firms with high proprietary disclosure costs, such as biotechnology and pharmaceutical firms, increase IPO activity the most. These firms are also more likely to take advantage of the act's de-risking provisions, allowing firms to file the IPO confidentially while testing-the-waters.

AB - In April 2012, the Jumpstart Our Business Startups Act (JOBS Act) was enacted to help revitalize the initial public offering (IPO) market, especially for small firms. During the year ending March 2014, IPO volume and the proportion of small firm issuers was the largest since 2000. Controlling for market conditions, we estimate that the JOBS Act has led to 21 additional IPOs annually, a 25% increase over pre-JOBS levels. Firms with high proprietary disclosure costs, such as biotechnology and pharmaceutical firms, increase IPO activity the most. These firms are also more likely to take advantage of the act's de-risking provisions, allowing firms to file the IPO confidentially while testing-the-waters.

UR - http://www.scopus.com/inward/record.url?scp=84925634949&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84925634949&partnerID=8YFLogxK

U2 - 10.1016/j.jfineco.2014.11.012

DO - 10.1016/j.jfineco.2014.11.012

M3 - Article

AN - SCOPUS:84925634949

SN - 0304-405X

VL - 116

SP - 121

EP - 143

JO - Journal of Financial Economics

JF - Journal of Financial Economics

IS - 1

ER -

The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision

Abstract

All Science Journal Classification (ASJC) codes

Access to Document

Other files and links

Fingerprint

Cite this