Journal article
Information Revealed through the Regulatory Process: Interactions between the SEC and Companies ahead of Their IPO
The Review of financial studies, v 33(12), pp 5510-5554
01 Dec 2020
Abstract
We analyze communications between the SEC and firms prior to IPOs using LDA analysis and KL divergence. The SEC's concerns closely map onto the regulator's stated mandate: companies increase prospectus disclosures on precise topics of SEC concern. Revenue recognition is the dominant topic of SEC concern, and it is not independently discovered by investors. Increased SEC concern about it is associated with greater secondary sales, lower post-IPO liquidity, lower post-IPO returns, and a higher probability of withdrawal. The regulator's role during the capital raising process results in increased transparency but contributes to delays in the going public process.
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Details
- Title
- Information Revealed through the Regulatory Process: Interactions between the SEC and Companies ahead of Their IPO
- Creators
- Michelle Lowry - Drexel UniversityRoni Michaely - Geneva Finance Research InstituteEkaterina Volkova - University of Melbourne
- Publication Details
- The Review of financial studies, v 33(12), pp 5510-5554
- Publisher
- Oxford Univ Press
- Number of pages
- 45
- Grant note
- Raj and Kamla Gupta Governance Institute
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000595485200002
- Scopus ID
- 2-s2.0-85097496254
- Other Identifier
- 991019168006204721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics