Initial public offerings of foreign companies on stock markets in Europe – an institutional perspective

Abstract

This paper aims to identify the institutional factors that shape the initial public offerings (IPOs) of foreign companies on regulated stock markets in Europe from 2010 to 2022. Using the panel Autoregressive Distributed Lag methodology, this study examines the long- and short-term relationships between institutional factors and the IPO activities of foreign companies. The findings reveal that government spending, the country’s image abroad, GDP, the tax burden, scientists’ associations, health infrastructure, and pension systems significantly influence IPO activity in European stock markets. The study is distinctive in its use of the PEST method to comprehensively analyze a wide range of institutional factors, offering new insights into the determinants of cross-border IPO performance in European stock markets.

Keywords

• european stock market
• formal institutions
• go public
• institutional theory
• ipo activity
• g15
• g23
• g32