Lockup Agreements and Survival of UK IPOs

Ahmad, W. and Jelic, R. (2014) Lockup Agreements and Survival of UK IPOs. Journal of Business Finance and Accounting, 41 (5-6). pp. 717-742. ISSN 0306686X (ISSN)

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This paper examines the role of lockup agreements on the survival of 580 UK Initial Public Offerings (IPOs) during the period of 1990-2011. Our accelerated failure time (AFT) survival model shows a statistically and economically significant effect of lockup length on the post-IPO survival. A 12 month increase in median lockup period increases the (median) survival time by 27%. Furthermore, the failure rates for IPOs with longer lockups are consistently lower than the failure rates for IPOs with shorter lockups regardless of delisting reasons. The results are robust to choice of different survival estimation models, heterogeneity, clustering, and alternative specification of variables. Our results highlight the importance of lockup characteristics on the subsequent survival of newly listed firms and inform recent debate regarding alleged short-termism in the UK equity market. © 2014 The Authors Journal of Business Finance & Accounting published by John Wiley & Sons Ltd.

Item Type: Article
Identification Number: https://doi.org/10.1111/jbfa.12068
June 2014Published
Uncontrolled Keywords: Going private, IPOs, Lockups, Private equity, Survival
Subjects: CAH17 - business and management > CAH17-01 - business and management > CAH17-01-02 - business studies
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School
Depositing User: Yasser Nawaz
Date Deposited: 23 Nov 2016 15:12
Last Modified: 22 Mar 2023 11:49
URI: https://www.open-access.bcu.ac.uk/id/eprint/1971

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