Macroeconomic determinants and the issuance of initial public offerings: evidence from Asia-Pacific region / Muhd Aiman Syakir Othman

IPO is one of the alternatives in the acquisition of funds besides debt financing. However, the decision to go public is significant for a firm as it dilutes the ownership and involves a full restructuring of the management and operations. Thus, a careful research on various factors must be conducted by firms in order to ensure the right timing to issue IPOs in accordance to macroeconomic situation. This paper aimed to address the question of whether macroeconomic variables have an impact on the number of IPOs issued. The study utilized gross domestic production growth rate (GDP), interest rate (INT), inflation rate (INF), foreign direct investment (FDI), index of industrial production (IIP) and bank credit (BC). It covered eleven (11) stock markets across the Asia-Pacific region over the period of 2010-2015 as they are dominating the global IPO market. Specifically, it focused on Australia, Bangladesh, China, India, Japan, Malaysia, Pakistan, Philippines, Singapore, Thailand and United States. The highlights of the findings ascertained are as follows; INT, INF, FDI and CREDIT showed an inverse relationship with the number of IPOs whereas GDP and IIP have no impact on the dependent variable. Researcher hopes that this research will guide firms on the suitable timing and economic condition for going public in reference of historical trends of IPOs issuance.