2019/03/07 by Alexander W. Butler, Larry Fauver, Ioannis Spyridopoulos · 1 citation
Economics, Econometrics and Finance · Business, Management and Accounting · #Housing Market and Economics #Corporate Finance and Governance #Fiscal Policy and Economic Growth
paper · pdf · doi:10.1017/s0022109019000188
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.