Graduation Year

2015

Date of Submission

4-2015

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Reader 1

Murat Binay

Rights Information

© 2015 Brian A. Bevilacqua

Abstract

This paper investigates the influence of takeover premiums, venture capitalist (VC) activity, and first day trading returns on the volume of initial public offerings (IPO). Motivated by the hot-market theory, I enhance the approach by examining how other markets outside of the public equity market determine IPO volume. Examining quarterly averages of daily transactions from 1995 to 2015, I use panel data regressions to conclude that IPO volume is influenced by merger and acquisition (M&A) premiums and VC activity. My findings indicate that M&A premiums and VC activity both have significant negative relationships with IPO volume. I also find that the significance of each variable is highly subjective to lag and industry type. These results suggest that private companies base their decision to go public off more than just the stock market, and instead rely on a multitude of market factors.

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