Small Firms: Do They Have Better to Go Public?

Abstract

This paper aims to study the factors that push companies to open its capital to the public. In particular, it examines the impact of a number of factors to explain the under valuation of stock market introduction, particularly performance, debt, liquidity and ownership structure. Our results indicate that large firms are increasingly overvalued. The indebtedness accentuates the problem of overvaluation observed after the IPO. In addition, firms whose capital is concentrated are increasingly under-valued over a long period after the IPO. Our results show that Tunisian companies do not observe the motivation of the search for a better performance after IPO.