We question whether an evolution in the national legal system leads to higher valuations for companies going public. We investigate this issue with reference to the population of firms going public on the main and second stock markets in the three largest economies of Continental Europe over the last fifteen years (1995-2009). We use a new dynamic measure of the evolution of the legal framework, defined as the compliance record of the Member States of the European Union. Controlling for the nature of the firm as well as for the identity of the ultimate shareholder, we find that an increase in the annual number of infringements is related to a decrease in the valuation of the firms going public. Therefore, we conclude that a higher evolution of the legal system leads to higher valuations of firms.

(2010). The Valuation of IPOs in the European legal framework [journal article - articolo]. In CORPORATE OWNERSHIP & CONTROL. Retrieved from http://hdl.handle.net/10446/24569

The Valuation of IPOs in the European legal framework

MEOLI, Michele;PALEARI, Stefano;VISMARA, Silvio
2010-01-01

Abstract

We question whether an evolution in the national legal system leads to higher valuations for companies going public. We investigate this issue with reference to the population of firms going public on the main and second stock markets in the three largest economies of Continental Europe over the last fifteen years (1995-2009). We use a new dynamic measure of the evolution of the legal framework, defined as the compliance record of the Member States of the European Union. Controlling for the nature of the firm as well as for the identity of the ultimate shareholder, we find that an increase in the annual number of infringements is related to a decrease in the valuation of the firms going public. Therefore, we conclude that a higher evolution of the legal system leads to higher valuations of firms.
articolo
2010
Meoli, Michele; Paleari, Stefano; Vismara, Silvio
(2010). The Valuation of IPOs in the European legal framework [journal article - articolo]. In CORPORATE OWNERSHIP & CONTROL. Retrieved from http://hdl.handle.net/10446/24569
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/24569
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