Why do companies choose to go ipos? New results using data from Taiwan

We examine the determinants of IPOs in Taiwan for the period 1989 to 2000. The regulations in Taiwan permit us to identify firms that met IPO requirements but chose not to go public, allowing for comparisons of firms that choose IPOs and those do not. We find strong evidence that IPOs are not motivated by financing need, that larger and profitable firms are more likely to list equity, and that venture capital provides certification to firm credibility. Other findings provide support for information asymmetry, listing costs, liquidity, owners’ diversification desire, timing, and facilitation of M&As as factors influencing IPO decisions. (JEL G32, G15, G24)