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Anti-collusion leniency legislations and IPO activity: Worldwide evidence

Author

Listed:
  • Duong, Huu Nhan
  • Goyal, Abhinav
  • Zolotoy, Leon

Abstract

We study the impact of the staggered adoption of anti-collusion leniency legislations around the world on IPO activity. We document that the passage of leniency legislations prompts IPO activity. The effect is amplified in more concentrated industries, while it is mitigated in countries with more stringent competition laws in place and countries in which investors have a lower ability to diversify risk in the financial market. Collectively, these findings are consistent with the view that, by enhancing product market competition, leniency legislations increase the benefits for firms from going public, resulting in higher IPO activity. The results of supplemental analyses suggest that the passage of leniency legislations leads to less underpriced IPOs and a more efficient use of IPO proceeds, and prompts firms with less proprietary information to go public.

Suggested Citation

  • Duong, Huu Nhan & Goyal, Abhinav & Zolotoy, Leon, 2024. "Anti-collusion leniency legislations and IPO activity: Worldwide evidence," Journal of Corporate Finance, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:corfin:v:89:y:2024:i:c:s0929119924001536
    DOI: 10.1016/j.jcorpfin.2024.102691
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    More about this item

    Keywords

    Leniency legislations; IPO activity; Product market competition;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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