tailieunhanh - Europe’s ‘New’ Stock Markets Laura Bottazzi and Marco Da Rin

A number of for mal and infor mal exter nal review ers of ear lier drafts of the report greatly improved the final prod uct. Par ticu lar men tion should be made of the very detailed and help ful com ments of Cees de Haan of the World Bank and Mag gie Gill of Natu ral Resources Inter na- tional (.) in this regard. While the tech ni cal live stock pro duc tion aspects of this report, authored as it is by econo mists, proba bly still falls short of their high stan dards, there is no doubt that they sub stan tially. | INNOCENZO GAS PARIN I INSTITUTE FOR ECONOMIC RESEARCH Institutional Members CEPR NBER and Università Bocconi WORKING PAPER SERIES Europe s New Stock Markets Laura Bottazzi and Marco Da Rin Working Paper n. 218 July 2002 IGIER - Università Bocconi Via Salasco 5 20136 Milano -Italy http The opinion expressed in the working papers are those the authors alone and not those of the Institute which takes non institutional policy position nor of CEPR NBER or Università Bocconi. Europe s New Stock Markets Laura Bottazzi Università Bocconi IGIER and CEPR and Marco Da Rin Università di Torino and IGIER July 2002 First version February 2001 Abstract The creation of Europe s new stock markets represents a major experiment in market design with important implications for the ability to support innovative fast-growing companies. We evaluate the success of these markets based on a large number of measures of firm performance and strategy which extend to several pre- and post-listing years. Our hand collected database is obtained from the listing prospectuses and annual reports of 538 companies which listed on the Neuer Markt Nouveau Marché and Nuovo Mercato from 1996 through 2001. Three findings stand out. First these companies experience a dramatic change after the IPO rebalancing their capital structure increasing their debt and investment accelerating growth and becoming less profitable. These changes are consistent with the existence of credit constraints and are greater than for companies listing on the main markets. Second we document a considerable variation in post-IPO growth rates and corporate strategy across both companies and markets. This variation is largely due to the ability to raise equity capital at IPO. Third the adoption of US GAAP accounting standards substantially increases firms ability to raise capital. While Europeỗs new markets have provided high-growth companies with an unprecedented opportunity to finance their growth the .