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Why Do Companies Stay Private? Determinants for IPO Candidates to Consider in Poland and the Czech Republic

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  • Tomáš Meluzín
  • Marek Zinecker
  • Adam P. Balcerzak
  • Michał B. Pietrzak

Abstract

We surveyed sixty-five chief financial officers (CFOs) at nonpublic and nonfinancial companies in the Czech Republic and Poland that are considered candidates for an initial public offering (IPO) to document their propensity to decline to launch an IPO and maintain private ownership. First, we found that the main arguments against launching an IPO in both countries involve information disclosure and limitations on decision-making control. Surprisingly, the majority of the managers do not see the capital market as a source of cheaper and more flexible financing compared to bank loans and other sources. In terms of exogenous factors, Polish CFOs are opportunistic with regard to the timing of an IPO. They view “the window of opportunity” in terms of overall business and industry conditions as significantly more important than do their Czech counterparts. Czech CFOs rank IPO-related demands on time and costs as the main obstacle to going public. Finally, Czech CFOs agree that a lack of confidence in the capital market is their major concern more frequently than do their Polish peers.

Suggested Citation

  • Tomáš Meluzín & Marek Zinecker & Adam P. Balcerzak & Michał B. Pietrzak, 2018. "Why Do Companies Stay Private? Determinants for IPO Candidates to Consider in Poland and the Czech Republic," Eastern European Economics, Taylor & Francis Journals, vol. 56(6), pages 471-503, November.
    • Handle: RePEc:mes:eaeuec:v:56:y:2018:i:6:p:471-503
    DOI: 10.1080/00128775.2018.1496795
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    Citations

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    Cited by:

    1. Tomasz Sosnowski, 2022. "Persistence of pre-IPO earnings of new companies from CEE stock markets," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(2), pages 415-434, June.
    2. Bartłomiej Igliński & Michał Bernard Pietrzak & Urszula Kiełkowska & Mateusz Skrzatek & Artur Gajdos & Anas Zyadin & Karthikeyan Natarajan, 2022. "How to Meet the Green Deal Objectives—Is It Possible to Obtain 100% RES at the Regional Level in the EU?," Energies, MDPI, vol. 15(6), pages 1-24, March.
    3. Bartłomiej Igliński & Michał Bernard Pietrzak, 2022. "Renewable and Sustainable Energy: Current State and Prospects," Energies, MDPI, vol. 15(13), pages 1-7, June.
    4. Marek Zinecker & Martina Skalicka & Adam P. Balcerzak & Michał Bernard Pietrzak, 2022. "Identifying the impact of external environment on business angel activity," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 83-105, December.
    5. Dewi Ratih S.E. & M.S.M., 2023. "What Information Implied in the Equity Offering Mechanism with Market Timing Considerations?," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 17-32.
    6. Anna Manowska & Anna Bluszcz, 2022. "Forecasting Crude Oil Consumption in Poland Based on LSTM Recurrent Neural Network," Energies, MDPI, vol. 15(13), pages 1-23, July.
    7. Olgun Aydin & Bartłomiej Igliński & Krzysztof Krukowski & Marek Siemiński, 2022. "Analyzing Wind Energy Potential Using Efficient Global Optimization: A Case Study for the City Gdańsk in Poland," Energies, MDPI, vol. 15(9), pages 1-22, April.
    8. Balcerzak, Adam P. & Zinecker, Marek & Skalický, Roman & Rogalska, Elżbieta & Doubravský, Karel, 2023. "Technology-oriented start-ups and valuation: A novel approach based on specific contract terms," Technological Forecasting and Social Change, Elsevier, vol. 197(C).

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