The Competing-Risk Analysis of Post-IPO De-Listings

Abstract

This paper is working on one IPO panel data to estimate the predicting power of some co-variates on future status of IPO firms after going public. Specifically, our study aims to study how the possibility of the de-listing due to two major reasons, including merges, and bad performance (liquidation/bankruptcy), is affected by those co-variates. There are two main findings from our analysis. First, the results show that the inclusion of the aftermarket performance in a competing risk model helps to distinguish the impact of those co-variates on the de-listings caused by two events. Such co-variates as profitability have opposite effect on different events triggering the de-listing, mergers and bad performance. Second, our evidences indicate that time-varying co-variates may impact the de-listings in different ways. For instance, profitability appears to affect the voluntary de-listings only until last year before de-listing. In sum, our paper contributes to the prior literature by shedding light on how voluntary/forced post-IPO de-listings are determined.