Going public: empirical study of motives and efficiency of IPO in CIS

The market for initial public offering (IPO) undertaken by the companies from emerging capital markets has been rapidly growing until the global financial crisis. IPO is based on strategic decisions and is related to managerial and investors' policies at different organizational life-cycle stages. It may change the voting power structure as well as the financing policy and represents rather complex financial transaction. Theoretically, one of the main incentives to start IPO is the need for outside equity finance. It is also assumed that additional capital will be invested and will contribute to the increase in company's efficiency. On one side the efficiency of IPO depends on the capital market conditions and pricing the offer. The research based on the developed counties' experience also provides some evidence that the underlying motives influence the results derived from IPO. However, there has been found no sound empirical evidence on the efficiency of IPO undertaken by the firms from transition economies. In this paper we contribute to the literature by applying research models to the data of the firms in CIS. We study the relation between motives, IPO structure and operating efficiency gained after public offering.