Institutions and IPO activity: a multi-country study

Purpose The purpose of this paper is to analyze the differential effects that institutions have on country IPO activity. Design/methodology/approach With a sample of 64 countries over a 15-year period (2000-2014), the authors test the variables rule of law, uncertainty avoidance and masculinity on subsamples of developed (27) and emerging (37) countries to explore their influence on domestic IPO activity level. Findings For developed countries, only uncertainty avoidance and masculinity are significant. Within emerging countries, it is uncertainty avoidance and rule of law that are significant. Research limitations/implications Using different country classification frameworks could yield more detailed and focused results on the influence that country-level variables have on IPO activity. Practical implications Multinational firms could use these findings for decisions related to their potential subsidiary IPOs. Originality/value This is a novel empirical work relating institutions to IPO activity, using emerging and developed country subsamples. It also focuses on IPO activity instead of IPO underpricing/performance and contributes to extend the scope of the IPO literature to global non-Anglo contexts.