Family Firms IPO Activity and Pricing: Evidence from Poland

Abstract

Lack of sufficient capital is sometimes one of the barriers for the development of family firms. In a situation when the company owners do not have the possibility to recapitalize the company, or no possibility of increasing the scale of the use of foreign capital, an important source of funding may become an issue of shares directed to external entities. The article analyzes the activity of family firms in the process of raising capital through the issue of shares on the public market of securities - Stock Exchange and in the alternative trading system – NewConnect market. The analysis was conducted based on data from 2013-2015. In that period the share issues of family firms accounted for 30% of all IPOs on the Warsaw Stock Exchange and 43% on the NewConnect market. The article also examined the phenomenon of stock prices underpricing in the initial public offering. The scale of underpricing in family firms and other companies was compared.