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Lockup agreements and survival of UK IPOs

journal contribution
posted on 2023-06-08, 19:16 authored by Wasim Ahmad, Ranko JelicRanko Jelic
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.

History

Publication status

  • Published

Journal

Journal of Business Finance and Accounting

ISSN

0306-686X

Publisher

Wiley

Issue

5-6

Volume

41

Page range

717-742

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2014-12-15

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    University of Sussex (Publications)

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