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Where Have All the IPOs Gone? Trade Liberalization and the Changing Nature of U.S. Public Corporations

Published online by Cambridge University Press:  11 December 2023

Thomas P. Griffin Open the ORCID record for Thomas P. Griffin [Opens in a new window]
Thomas P. Griffin*
Affiliation:
Villanova University Villanova School of Business
*
thomas.griffin@villanova.edu
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Abstract

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I show that a tariff policy change that increased trade with China led to a decline in U.S. public listing rates and elevated industry concentration. Consistent with heterogeneous firm models of trade, the shock impeded the entry and performance of small domestic manufacturers but did not adversely impact large multinationals. In addition, stock price reactions to the tariff policy change and threat of reversal imply that trade liberalization creates or destroys value depending on firm size. These findings suggest that recent trends in the U.S. public equity market are driven, in part, by fundamental changes in the global competitive landscape.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 40
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

I thank an anonymous referee and Ran Duchin (the editor) for their excellent feedback. I also thank David Becher, Eliezer Fich, Michelle Lowry, Greg Nini, Jérôme Taillard, and seminar participants at Babson College, Drexel University, and Villanova University. A previous version of this article was titled “Globalization and US Industry Concentration.”

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