Macro-economic determinants of the IPO waves: An assessment of G-7 countries

Abstract

Background: The objective of this study is to explore the macroeconomic factors considered by companies in scheduling initial public offerings (IPOs). Methods: The panel data analysis method was employed to investigate the relationship between the frequency of IPOs and selected macroeconomic indicators within the stock markets of G-7 countries spanning from 1999 to 2020. An econometric model utilizing a random effect approach was utilized, employing the Driscoll-Kraay resistant standard estimator to address deviations. Results: The analysis revealed that stock market returns exert a statistically significant positive influence on the volume of public offerings. Conclusions: Based on these findings, it can be inferred that companies strategically time their IPOs during periods characterized by relatively high stock market returns.