Journal of Financial and Quantitative Analysis Vol. 54 No. 3 2019

Local Economic Spillover Effects of Stock Market Listings

Alexander W. Butler^{1,2,3,4,5,6,7}; Larry Fauver^{1,2,3,4,5,6,7}; Ioannis Spyridopoulos^{1,2,3,4,5,6,7}

¹ Texas Tech University · ² Baylor University · ³ American University · ⁴ Vanderbilt University · ⁵ Financial Management Association International · ⁶ Rice University · ⁷ University of Tennessee at Knoxville

Abstract

We show that initial public offerings (IPOs) have nontrivial positive spillover effects on local labor markets, business environments, consumer spending, real estate, and migration. We mitigate endogeneity concerns about unobserved heterogeneity with restrictive geographic fixed effects coupled with a matching procedure. We show that it is the listing decision, which encompasses both a wealth and liquidity shock, that induces economic spillovers. Conditional on an IPO occurring, we estimate that an additional $10 million in IPO proceeds is associated with an extra 41 jobs and 0.7 new establishments locally.

DOI

10.1017/s0022109019000188

Volume

54

Issue

3

Pages

1025-1050

Language

en

Sources

openalex crossref bibtex:phds-export.bib

Cite

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