Publication

This paper discusses the relevance of non-market interaction for the timing of initial public offerings (IPOs) in the French and German primary equity markets using a micro-econometric approach. The author finds that the surge of IPO volume in the late 1990s appears to be consistent with rational expectations and not with adaptive expectations. He holds that this supports the hypothesis that hot issue markets are endogenous and that they may generate large welfare gains by boosting the incentives for technological innovation in start-up firms.