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The timing of voluntary delisting

Author

Listed:
  • Azevedo, Alcino
  • Colak, Gonul
  • El Kalak, Izidin
  • Tunaru, Radu

Abstract

For many firms, voluntarily delisting from a stock exchange can be optimal. We model an entrepreneur's incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm's performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.

Suggested Citation

  • Azevedo, Alcino & Colak, Gonul & El Kalak, Izidin & Tunaru, Radu, 2024. "The timing of voluntary delisting," Journal of Financial Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:jfinec:v:155:y:2024:i:c:s0304405x24000552
    DOI: 10.1016/j.jfineco.2024.103832
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    More about this item

    Keywords

    Voluntary delisting; Political uncertainty; Regulatory uncertainty; Competing risk;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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