Market Making Contracts, Firm Value, and the IPO Decision
| 主讲人 |
Jia Hao |
简介 |
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<div style="text-align: left;">Abstract:</div>
<div style="text-align: left;">We examine the effects of secondary market liquidity on firm value and the decision to conduct an Initial Public Offering (IPO). Competitive liquidity provision can lead to market failure as the IPO either does not occur or the IPO price is discounted to reflect that some welfare-enhancing secondary trades do not occur. Market failure arises when uncertainty regarding fundamental value and asymmetric information are large in combination. In these cases, firm value and social welfare are improved by a contract where the firm engages a Designated Market Maker (DMM) to enhance liquidity. Our model implies that such contracts represent a market solution to a market imperfection, particularly for small growth firms. In contrast, proposals to encourage IPOs by use of a larger tick size are likely to be counterproductive.</div>
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| 时间 |
2015-01-21(星期三)16:30-18:00 |
地点 |
N303 经济楼/Economics Building |
| 讲座语言 |
English |
主办单位 |
WISE-SOE |
| 承办单位 |
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类型 |
独立讲座 |
| 联系人信息 |
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主持人 |
Qian Han (WISE) |
| 专题网站 |
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专题 |
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| 主讲人简介 |
<p>Visiting Scholar<br />
Department of Finance<br />
Stephen M. Ross School of Business<br />
University of Michigan</p>
<p><a href="/EventsMgr/Upload/File/2015/1/20150114104057495.pdf">Prof. Jia Hao's CV</a></p> |
期数 |
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