Research objectives and content:
To understand the role of equity financing in fostering entrepreneurial activity, this research proposes to analyse initial public offerings (IPO). The current research into the timing of IPOs either focues on changes in the structure of corporate governance which is effected by the IPO or on the strategic use of information during an IPO. However, the state of the literature on this topic lays bare that the theoretical approaches undertaken largely neglect to consider the firm in an industry setting. In particular, given the importance of control rights attached to an equity contract, their value should depend on the stage of development of the industry and the exisitence of potential competitors which might use these rights as an external control device. Furthermore, the availability of information on a firm planning a flotation should depend on the overall information available on the industry and the number of rival firms already listed on a security
exchange. While these are important theoretical additions, it also is necessary to advance the empirical work in this area. Promising avenues of further research include the link between IPOs and patents as well as an examination of clustering of IPOs by indstry.
Training content (objective, benefit and expected impact):
I expect to benefit from the research project in two ways: first, I would like to enhance my modelling skills of economic relationships (signalling equilibria, game-theoretic modelling of industry interaction) and, secondly, I would like to acquire more expertise in econometrics both in the cross-section and time-series