Survival of the fittest or the fattest? Exit and financing in the trucking industry

Article Abstract:

This paper studies the impact that capital market imperfections have on the natural selection of the most efficient firms by estimating the effect of the prederegulation level of leverage on the survival of trucking firms after the Carter deregulation. Highly leveraged carriers are less likely to survive the deregulation shock, even after controlling for various measures of efficiency. This effect is stronger in the imperfectly competitive segment of the motor carrier industry. High debt seems to affect survival by curtailing investments and reducing the price per ton-mile that a carrier can afford to charge after deregulation. (Reprinted by permission of the publisher.)

Trucking, General Freight Trucking, Trucking & Courier Services, Ex. Air, Finance, Transportation industry, Deregulation

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Why do companies go public? An empirical analysis

Article Abstract:

Using a large database of private firms in Italy, we analyze the determinants of initial public offerings (IPOs) by comparing the ex ante and ex post characteristics of IPOs with those of private firms. The likelihood of an IPO is increasing in the company's size and the industry's market-to-book ratio. Companies appear to go public not to finance future investments and growth, but to rebalance their accounts after high investment and growth. IPOs are also followed by lower cost of credit and increased turnover in control. (Reprinted by permission of the publisher.)

Italy

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Initial public offerings: an analysis of theory and practice

Article Abstract:

A study on three hundred and thirty six chief financial officers, and comparing theory to few dimensions of practice, is presented. These dimensions relate to initial public offerings and include motivation, timing, underwriter selection, underpricing, signaling, and the decision to remain private.

United States, Management dynamics, Practice, Chief financial officers, Company public offering

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