9.amalendu bhunia's rjfa 98 127

Research Journal of Finance and Accounting www.iiste.org

ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)

Vol 2, No 4, 2011

98

AN EMPIRICAL ANALYSIS OF GLOBAL AND DOMESTIC

IPO ACTIVITIES IN SELECTED COUNTRIES BEFORE

AND AFTER THE FINANCIAL CRISIS

Malayendu Saha

Professor, Department of Commerce

University of Calcutta

87/1, College Street, Calcutta-700073

West Bengal, India

[email protected]

Amalendu Bhunia

Reader, Department of Commerce

Fakir Chand College, Diamond Harbour

South 24-Parganas – 743331

West Bengal, India

[email protected]

Abstract

The financial crisis in the world over the past years has taken a heavy toll not only on most of the global

economies, but relentlessly impinges on the financial markets as well. This has affected the globalized

banking system to an abrupt collapse and led the worldwide initial public offer (IPO) activity to plummet.

However, the landscape has been transforming since the later part of 2009 with the emerging markets

dominated the proceedings both by value and in volume. Momentum has also been building rapidly in the

revival of global economy as the Governments are taking steady initiatives to mitigate those damages and

shield themselves from the next crisis. The paper aspires to make a comprehensive look at the global IPO

market during the pre and post financial crisis period.

Keywords: Global IPO activity, global financial crisis, domestic IPO activity, macro-economic variables

1. Introduction

A considerable amount of fund raising by the corporate entities mostly comes either from internal sources,

such as retained earnings or through external capital comprising bank credits, equity markets, corporate

bond markets, external commercial borrowings, foreign direct investments and private equity. Facing the

combined burden of an economic recession and plunging capital market, many of the sources of

firm-financing have dried up and slowed down corporate investment and growth. The crisis has not only

taken a heavy toll on most of the economies in the world but severely affected the developed markets with

traditionally strong resources contingent, plunged in valuations in the mining and metal sectors, constrained

credits and made abrupt collapse of the globalized banking system leading to worldwide initial public

offerings (IPO) activity to plummet by more than half. Moreover, shaky economic fundamentals, negative

http://www.iiste.org/

mailto:[email protected]



Vol 2, No 4, 2011

99

investor sentiment and the volatility in equity markets have also acted as the major impediments to the

performance of global IPO market. Investor’s appetite for investment and companies’ willingness to list

have sternly undermined and impacted the global markets. Indeed, a newer literature, which includes

Shleifer and Wolfenzon (2002), Doidge, Karolyi, and Stulz (2007), and Stulz (2009) addresses the impact

of financial globalization on IPO activity and suggests that home country laws and governance institutions

may have opposite effects on domestic compared to global IPOs. The IPO landscape, however, has

significantly transformed during the fourth quarter of 2009-10 with the emerging markets dominated the

proceedings both by value and in volume. The volume of issues has increased steadily and grew in

momentum throughout the year supported by reinforced market fundamentals. Improvement has also seen

building rapidly in the global economy with the manufacturing sector started replenishing; the service

sector has underway escalating performance and a faster recovery of international trade and finance. But

the panorama remains uneven and evidence is mounting of a multi-speed recovery. In this paper attempts

are made to have a comprehensive look at the global IPO market during the pre- and post-financial crisis

period.

1.1 The Genesis of the Crisis

The financial crisis is assumed to be the consequence of (i) monetary policy implemented by Fed

Reserve and (ii) growing global imbalances. The monetary policy, during the tenure of Allan Greenspan as

its Chairman, fashioned a general impression that the interest on capital in a free market economy could

never be at risk and that encouraged the use of high leverage as a source of sustainable high profits from

bubbles. Fed’s monetary policy, as such, was responsible for two most unpleasant outcomes – speculation

and leverage – which, in turn, induced the potential for a severe financial crisis. Moreover, the safe heaven

appeal of the US dollar, as the key international currency and the assured high return on financial

investment in the US capital market, led to a situation where the country maintained continually large and

growing unsustainable current account deficits. In such a situation, countries with current account surpluses

or large foreign exchange reserves kept investing in the US markets resulting imbalances and ending up

with crisis. In addition, the deterioration in credit standards facilitated by sustained easy monetary policy

and deregulation encouraged opportunity for shifting of credit risk through securitization and contributing

to the growth in credit to sub-prime segments. Earlier, it was quite difficult to securitize any type of loan,

like sub-prime loans, and create a market for them. The financial engineers of the Wall Street, however,

found the answer by two means: first by converting the pool of difficult to market loans into sub-prime

residential mortgage-backed securities (MBSs) and collateralised debt obligations (CDOs), and second, by

creating market for different tranches based on ‘ratings’. As the prices of toxic papers witnessed free fall,

losses for the banks having exposure to such papers rose significantly, and the capital buffer turned

increasingly inadequate, creating concerns for insolvency. Moreover, as the risk taking ability of these

banks eroded, the flow of money for financing real activities became difficult resulting stress on capital.

This was observed both in money market and credit market in the advanced economies. The real economic

activity started decelerating as aggregate demand, particularly private consumption and investment

opportunities shrank under the pressure of deleveraging, wealth loss associated with falling asset prices,

rising unemployment, and deteriorating climate for investment and employment. In view of the adverse

feedback in the advanced economies, policies were initiated by the respective governments aiming to

address both financial trauma and economic downturn.




Vol 2, No 4, 2011

100

1.2 Objectives

The main objectives of the present work are to make a study about global IPO market during the pre-

and post-financial crisis period. More specifically, it seeks to dwell upon mainly the following issues:

1. To view on the global IPO markets with top five country-level IPO markets during the pre- and

post-financial crisis period;

2. To assess the global IPO activities during the pre- and post-financial crisis period;

3. To explore the relationship between global IPO activities and domestic IPO activities;

4. To examine the association of country-level macro-economic variables with global IPO activities.

1.3 Hypotheses

Keeping the above objectives in mind, the following null and alternative hypotheses have been

formulated and tested during the study period:

Hypothesis 1

H0: When global IPO markets increases, country-level IPO market remains same;

H1: When global IPO markets increases, country-level IPO markets also increases.

Hypothesis 2

H0: There is no relationship between global IPO activities and the IPO activities of the

domestic institutions;

H1: There is a significant relationship between global IPO activities and the IPO activities of

the domestic institutions.

2. The Impact of the Crisis on Global IPO Market

Though the global IPO market earlier had the harsh experience of weathering the 1987 market crash,

the Russian debt implosion, the internet bubble bursting and the 9/11 episode, but the market proved to be

remarkably hard-wearing in the current episode during the recent times. The unprecedented financial crisis

affected the global IPO issuance to come to a near halt during mid-2008. The overall drop in issuance was

huge, with global proceeds falling 69% year-over-year, and the most established IPO markets, the US and

Europe, were affected particularly hard. However, as assets being devalued globally, no IPO market was

insulated from the financial crisis. Almost all countries saw a substantial drop in quantum of deals and

fundraising, including the IPO powerhouses, such as BRIC countries (Brazil, Russia, India and China). In

2008, the BRIC countries together hosted 163 deals worth US$28 billion, a 62% drop in deal numbers and

a 76% decline in funds raised from 2007. Emerging markets, on the other, appeared to be relatively immune

to developed market economic meltdown. However, by the end of 2008, decoupling theories were

thoroughly debunked as emerging markets suffered a severe loss in asset values, liquidity and investor

confidence, just as in the developed markets.

During 2008, a total of 769 IPOs worldwide raised US$ 96 billion, representing a 61% drop in deal

numbers and a 67% decline in capital raised from 2007. The year experienced the lowest number of IPOs

since at least 1995 and since 2003 for capital raised. Faced with the lowest market valuations since the

1980s, a record number of prospective IPOs were withdrawn or postponed. By stark contrast, in 2007, the

global IPO activity had soared to an all-time high with 2,014 deals and US$ 295 billion in capital raised. In

2009, IPO markets continued to stagnate as volatile markets made it difficult to price and execute deals and

globally, a total of 51 IPOs in a wide range of sectors raised a mere US$1.4 billion. The largest offering for

the quarter was the US$828 million carve-out IPO of Mead Johnson Nutrition Co. on the New York Stock




Vol 2, No 4, 2011

101

Exchange (NYSE). However, in 2010, the IPO activity bounced back heavily throughout the world with

proceeds of US$ 285 billion comprising 1,398 IPO deals.

Insert Fig. 1 here

In the face of weakening economic fundamentals and the subprime crisis, the US saw 31 IPOs worth

US$ 25.9 billion, an 82% fall in deal numbers and 24% decrease in funds raised from the previous year.

Even so, in 2008, the US was the fundraising leader with 27% of the total global capital raised — this was

primarily due to the massive Visa deal, which by itself, made up 21% of global fundraising. Latin American

markets also ground to a halt in response to the global credit crunch, falling commodity prices and rising

interest rates. In 2008, the region saw just 10 IPOs together worth US$ 7.3 billion – estimating around 89%

plunge in deal numbers and 81% decline in funds raised from the previous year. Regionally, Latin America

made up 8% of global IPO funds raised in 2008, compared 13% in 2007. Europe, grappled with bleak

earnings outlooks, sinking stock markets and looming recession, generated just 168 deals worth US$ 13.6

billion, representing a 67% decrease in deal numbers and an 85% drop in funds raised from 2007. As a

region, the country accounted for 14% of global IPO fundraising, compared with a 32% share in 2007.

Threatened by the global banking crisis, oil price fluctuations, exchange rate devaluations and accelerating

inflation, Russia saw only two deals worth US$ 1 billion — a collapse of 90% in deal numbers and 95% in

funds collected during 2007. Chinese IPOs were sustained by a still fast growing economy and

infrastructural privatizations. In 2008, Greater China retained its lead globally in IPO deal numbers and

came in second only to the US in fundraising, with 127 deals worth a total of US$ 17.9 billion, a 51% drop

in deal numbers and a 73% decline in funds raised from 2007. In India, the widening financial crisis helped

trigger high volatility in the stock markets. During 2008, only 40 IPOs raised US$ 4.8 billion, representing

a 62% drop in number of deals and 45% decline in funds raised as compared with 2007. India’s leading

energy company, Reliance Power was the fourth largest IPO, raising US$ 3.0 billion on the Bombay Stock

Exchange, but now traded far below its offer price. In the first half of 2008, the Middle East, particularly

Saudi Arabia, emerged as a major player in the global IPO market. Shored up by vast liquidity, soaring oil

prices, infrastructural development and privatizations, the Middle East yielded 51 IPOs worth US$ 13.2

billion, representing 17% of global capital raised (compared with 7% in 2007).

Although all industries contributed to 2008 global IPO activity, the top three sectors accounted for

63% of total fundraising: financial services (US$ 26.0 billion), energy and power (US$ 18.3 billion) and

materials (US$ 16.0 billion). By number of deals, the leading sectors for IPOs were materials (185

offerings), industrials (108) and technology (84). The risk-averse investors, with all sectors down,

discounted heavily on high-growth companies. In terms of funds raised, real estate, healthcare and

technology industries declined the most, generating just US$ 1.8 billion (down 94% from 2007), US$ 1.1

billion (down 89%) and US$ 1.9 billion (down 88%) respectively (World IPO Report, 2011).

2.1 The Pre- and Post-crisis Global IPO market

The global IPO market during 2001-03 was extremely challenging. It took about two or three quarters

before the IPO market came back strongly. However, the impact of the present crisis was most severe and

widely extended than the Great Depression. Though massive capital was allocated to equities, still there

were lot of capital being invested to new ventures on the follow-on front. IPOs came back slowly initially

with activities accelerated during the last quarter of 2009 and deal flow was mostly dominated by mature

companies, including a large number of private equity-backed firms. Though performance was not so




Vol 2, No 4, 2011

102

encouraging, this, however, represented a natural progression in the recovery of IPO market with buyers

negotiating hard on price amidst a saturation of leveraged buyouts (LBO) offerings. The financial sponsors,

on the other, were not in favour of the current equity valuations, and viewed the IPO market as the best

available source of capital or liquidity.

The revival of the global IPO market, however, showed unevenness. Major disparities were observed

both in quality and business of IPOs originating from the dominant global players like US and China. The

US-based IPOs were led by LBOs and mortgage REITs, in contrast to the Chinese IPOs which raised

money to pour into her domestic infrastructure, its nascent pharmaceutical industry, and other

consumer-oriented enterprises. In short, while the US IPO market activity was largely geared to healing the

excesses of overleveraging in private equity and real estate, the Chinese IPOs were mostly directed towards

economic growth. PE-backed IPOs made a comeback (US $35 billion raised in 155 deals), particularly in

the US and Europe. The amount was more than double the US $16.8 billion raised in 2009, and almost

three times what sponsors rose in the trough of the recession in 2008. Nonetheless, activity is still behind

the peak of the cycle, when PE firms raised more than US $58 billion taking companies public in 2007. On

average PE-backed IPOs returned 27.2% in 2010. Performance of new issues during 2009 was much

improved over 2008, although less impressive than historical standards. Early in the year, performance was

very strong as growing companies with attractive valuations were taken public. However, during the later

part, performance weakened because of a wave of private equity IPOs with more aggressive valuations and

riskier companies taking advantage of the widening window of opportunity for IPOs. Asian issuers,

particularly China and Hong Kong, continued to lead IPO activity in a five-year trend begun in 2006. Asia

raised the most IPO capital on record, making up almost 65% of the global proceeds (US $183.9 billion,

789 deals). Greater China achieved record high for fund-raising during 2010, accounting for 46% of global

funds raised – (US $131.8 billion in 509 deals) – a huge 165% increase from 2009. The recovery of global

IPO activity was most pronounced in the Hong Kong and Shanghai markets. Those two exchanges together

raised $54 billion, which accounted for 51% of total global proceeds after the Chinese government ended a

nine-month IPO freeze on the Shanghai exchange, leading to a slew of companies going public that had

been waiting to raise capital for nearly a year or more. In global regions beyond the US and Asia, the

recovery was less pronounced in Europe where the IPO proceeds fell significantly from 2008. However, the

continent still produced $6 billion in fourth quarter, compared with under $500 million for the first nine

months, which reflected that Europe’s IPO markets had begun to recover. By the end of 2010, IPOs on

European exchanges raised the highest volume since 2007 (US $36.7 billion in 252 deals), a huge 395%

increase in fund-raising from 2009. The only other region to see a significant decline in IPO activity was

the Middle East and Africa, which saw a continuation of the 2008 declines as risk appetite dried up for

frontier emerging markets. The biggest casualties were Saudi Arabia and the UAE, which together raised

$10.5 billion last year in the midst of the oil price run-up but only generated $747 million in 2009.

During the post-crisis period, though the international IPO market came from a variety of different

industries, there emerged some common themes. In China, the rebound was largely driven by consumer

oriented businesses, financial IPOs, and the country’s booming real estate sector. The financial theme, seen

in US and China, was also echoed in other markets. The other notable theme that attracted most IPOs was

infrastructure, particularly in China and notably in India. With investors attracted by growing economies

and large government stimulus packages, a huge amount of capital was raised by companies in the capital




Vol 2, No 4, 2011

103

goods, materials, energy, utilities and transportation sectors. India produced several large power generation

IPOs, while China saw a host of engineering and construction companies, Europe’s largest new issue was a

Polish utility service company. There were also IPOs by pipeline operators, shipping companies and energy

product manufacturers.

United States

During 2008, though the largest US IPO was launched, the IPO market was subdued by the global

economic crisis, year-old recession and tight credit mechanism. The market generated US$27 billion in 37

deals – an 82% decline in deal numbers and a 24% drop in fundraising compared with 2007. Even after

excluding the hefty Visa deal, the average 2008 US IPO deal size was quite substantial at US$207.7

million, a modest increase from the average deal size of US$198.8 million in 2007. The top IPO sectors for

funds raised in 2008 were financial services (insurance and banks) with US$20.0 billion raised (77% of

total capital raised), energy and power generating US$2.7 billion and materials comprising metals, mining

and paper yielding US$1.3 billion. The leading US IPO sectors in deal numbers were energy and power

with eight deals, healthcare with six offerings and the financial sector with five new issuances, including

Visa. Technology, finance and healthcare were the three US sectors which had the most withdrawals from

the IPO pipeline. The year 2009 for the US IPO market began as it had ended in 2008 – at a standstill. Only

one company went public during the first three months of the year was by Mead Johnson Nutrition Co., the

world’s biggest baby formula maker. However, as the broader equity indices improved, the IPO volume

improved sequentially in each of the next three quarters, buoyed by private equity-backed deals, mortgage

REITs and Chinese ADRs. For the year, there were 67 US IPOs, up 47% from 2008. Since the IPO market

has shrunk, many private companies may eventually succumb to a merger or an acquisition. In 2008, 59%

of funds raised through follow-on deals came from financial companies seeking capital to repair balance

sheets or to finance acquisitions. In Latin America, the number of IPOs was roughly the same in 2009 as in

2008. In 2009, nine IPOs raised a total of US$ 13.3 billion, whereas, 8 IPOs raised US$ 5.2 billion in 2008.

The Brazilian equity market led the Latin American IPO market. Of the US$ 13.3 billion raised in Latin

America, nearly US$ 13.2 billion was raised by Brazilian companies. Chile was the only other Latin

American country to have an IPO in 2009, with three companies raising a total of US$ 110.0 million.

Insert Fig. 2 here

The year 2010 saw the highest yearly fundraising on US exchanges since 2007 as the US emerged

from the recession (US$ 44 billion in 163 IPOs). About 40% of the 2010 amount, however, came from the

second-largest IPO in US history – the US$18.1 billion listing of automobile manufacturer General Motors

(GM) on the NYSE and Toronto. The US raised just 15% of global proceeds, a 60% increase in value from

the same period in 2009 but below its past 10 year average levels of 28%. Demand for capital by

fast-growth companies is still driving the IPO market in 2011, including many PE-or VC-backed companies

or small cap China-based listings. These IPOs accounted for more than two-thirds of all US deals,

reflecting the eagerness of the financial sponsors to monetize investments made earlier in the decade.

China

Following an unprecedented boom in 2006-07, China’s IPO market began its dramatic decline in late

2007, about a half year before the financial contagion spread into China. As a result of the financial crisis

and global recession, decreased activity was witnessed in China’s capital markets, with both the numbers of

IPO and value of capital raised dropping significantly in 2008. The decline was the outcome of speculation




Vol 2, No 4, 2011

104

by retail investors and unreasonably inflated valuations. By the end of 2008, the Shanghai index had fallen

65% with the IPO markets generated 97 deals worth just US$ 18 billion, a decline of 51% by deal numbers

and 73% fund raised from the previous year. Even so, among all countries, China still ranked first in respect

to number of IPOs, placed second only to the US for amount of capital raised and hosted four out of the top

20 IPOs in 2008. China’s largest IPO in 2008 (and the second largest globally) was the US$5.7 billion

offering of China Railway Construction Corp. Ltd., followed in size by the US$1.56 billion offering of

China South Locomotive & Rolling Stock Corporation Ltd. The leading industries (by funds raised) were

industrials (building, construction, transportation and infrastructure) which raised US$8.8 billion or 49% of

total funds raised in Greater China; materials (metals, chemicals, mining) produced US$3.0 billion; and

consumer staples (agriculture, food, textiles) yielded US$ 2.3 billion. The top sectors by number of deals

in China were materials with 30 deals followed by industrials (26) and consumer staples (17). With stable

economic fundamentals and huge accumulated reserves of US$1.9 trillion, the focus of the Government in

China, as the world’s third largest economy, was to nip the economic slowdown in the bud. Through its

$586 billion fiscal stimulus package, Beijing’s goal, on the other, was to stem falling stock prices, facilitate

business access to bank loans, restore investor confidence and allow the economy to recover by the second

half of 2009. According to Hong Kong Exchanges and Clearing data, the IPO market was quiet especially

from the second quarter onwards, when the trading environment deteriorated further. Despite such

conditions, some key deals were completed successfully. Greater China’s vibrant IPO markets also reached

record fund-raising levels, accounting for 46% of global funds raised in 2010. The exchanges raised US$

130 billion in 440 deals, a huge 152% rise in total value from 2009. The US$ 22.1 billion IPO of

Agricultural Bank of China, the last of China’s big state-owned commercial banks to list, was the world’s

largest IPO ever in 2010.

Insert Fig. 3 here

European countries

European IPO markets in 2008 were subdued in the face of the deep recession and global economic

crisis. Tight credit markets and falling commodity prices also slashed corporate earnings and dragged down

most major European stock indices by more than 40%. During the year, 201 IPOs generated just US$ 7

billion, a 67% decline by number of deals and 85% decline by funds raised from the previous year. The

average deal size fell to US$80.9 million, down 56% from 2007. The biggest European IPO was the

US$2.5 billion offering of Czech coal producer New World Resources which listed on the London, Prague

and Warsaw Stock Exchanges. Portugal’s renewable energy company EDP Renovaveis was the next largest

IPO with US$2.4 billion offerings. During the first quarter of 2009, European IPO markets produced seven

IPOs worth $11.3 million altogether. Six of these offerings were from Poland. Germany, France, Spain and

Italy together generated 14 IPOs, worth only US$1.4 billion, a steep 94% decline in number and 95% in

funds raised from 2007. Bolstered by its continuing convergence with the European Union (EU) economy

and a burgeoning domestic pension fund, Poland hosted numerous (73) IPOs. However, by the fourth

quarter of 2008, the offerings momentum came to a halt, despite several large privatizations in the Polish

pipeline.

In the first half of 2008, the energy and power sector generated US$5 billion, or 37% of total capital

rose in the region, followed by materials (metals, mining and chemicals) which raised US$2.9 billion and

telecommunications produced US$2.5 billion. The leading sectors by IPO deal numbers were technology,




Vol 2, No 4, 2011

105

with 24 deals, or 14% of the total number of deals in the region, industrials with 24 deals and consumer

products and services with 18 deals. In 2010, European IPOs began to revive, and achieved their highest

volume since 2007 (US$ 37 billion in 252 deals). In the first half of 2010, continued market dislocation and

sovereign debt crisis resulted in numerous withdrawals, postponements and highly discounted pricing.

However, during the second half, European investors regained their risk appetite, buoyed by improving

returns, a supportive interest rate environment and higher fund inflows into equities. Even so, while 2010

volumes represented a 395% rise from 2009, European IPO fund-raising remained far below the pre-crisis

levels in 2007 (US$ 100.4 billion). Europe accounted for just 13% of global captal raised, far less than the

10-year average of 25%. The energy and power sector raised the most capital (23%), followed by the

materials sector (which includes metals, mining and chemical companies).

Insert Fig. 4 here

India

In India, the corporate investment has been a significant source of economic growth over the past

several years. During the past decade, there has been tremendous growth in overall investment levels, from

less than 25% of GDP in 2000 to over 35% by 2006. Foreign financing of Indian corporations has increased

including external commercial borrowings, foreign direct investment, credit from foreign banks, and

foreign institutional investors that have participated in domestic equity markets. The global financial crisis

has made considerable impact on several sources of corporate financing. As foreign investors have been hit

by the crisis, they have pulled back from the Indian market and turned risk averse. While the second half of

2009 has seen a rebound in foreign inflows and the capital flows continues till 2010.

Insert Fig. 5 here

The private-sector issuances have been outpacing issuances by the public sector for the past several

years in the Indian primary market. A diverse array of companies from entertainment to banks, financial

institutions, construction, and infrastructure companies were the most frequent issuers in recent years.

While the number of IPOs declined from the peaks seen in the mid-90s when the markets first began to take

off, IPOs in the past several years have been generating ever increasing amounts of capital. In 2008, the

amount of capital raised averaged close to Rs. 500 crore per IPO, compared to a mean IPO size of less than

Rs.10 crore in the mid-1990s. In 2006, India’s IPO market made the list as one of the 10 biggest IPO

markets in the world. In 2008, the Reliance Power IPO became the biggest IPO in India’s history. The

almost US$ 3 billion offering was oversubscribed by approximately 10 times. When the global crisis hit

from mid-2008, the market fell dramatically. Between January 2008 and the Sensex low in March 2009, the

market declined 60% and P/E ratios dropped by more than 45% over the same time period. The fall was

also exacerbated by domestic investors who took money out of the market as job losses mounted and the

ongoing market decline began to hurt household wealth levels. India’s 36 IPOs in 2008 generated less than

US$ 5 billion, an over 60% drop in the number of deals and a 45% decline in funds raised compared with

2007. The combination of government support and the market rebound has increased the pace of equity

offerings since July 2008. In 2009, the IPO market began to pick up, boosted by offerings from the public

sector. However, uncertainty in the market lingered and there were again concerns of asset bubble could be

forming with foreign inflows. The country saw a dramatic recovery in its IPO markets in 2010 (US$ 8

billion in 63 IPOs. This revival has been a domestic consumption led-growth story driven by an influx of

capital from Western economies and a booming local stock market. India saw a growth of 215% in the




Vol 2, No 4, 2011

106

number of IPOs compared to 2009. There was a string of follow-on offerings from many previously

state-owned enterprises in the materials sector such as steel, oil and gas – all of which helped the Indian

Government raise funds to build roads, ports and power plants. This materials sector activity stems from

India US$ 10 billion divestment programme that spawned the largest IPO in India ever, the listing of the

world’s largest coal producer, US$ 3.4 billion Coal India, a former state-owned enterprise.

Middle East and Africa

The ever-growing track record of positive return from IPOs, the stock market boom and seeking

diversification of portfolios by the high net worth retail investors led to stimulating new issuances in the

Middle East. The IPO markets, during the first three quarters of 2008, seemed relatively immune to global

financial contagion. The country emerged as one of the leading IPO markets, reinforced by a large backlog

of IPO candidates, as well as soaring oil prices, unprecedented liquidity, profitable domestic markets,

limited exposure to toxic assets and GDP growth of 6.5%. Middle East IPO markets (in particular, Saudi

Arabia), contributing around 14% of all global fund-raising, produced US$16 billion in 77 IPOs during

2008 as compared to US$ 20 billion comprising 190 IPOs in 2001. Since the last quarter of 2008, however,

Middle East IPO activity slumped significantly in response to the falling stock markets, weakened

economies, collapsed oil prices, tighter external financing and overheated property markets, which

conspired to affect IPO activity. In the first quarter of 2009, the Middle East hosted just two IPOs worth

US$83.6 million, both from Saudi Arabia. The average Middle East IPO deal size in 2008 was about the

same as the previous year, about US$259 million. The prominent sectors for fund-raising were materials

(metals, mining and chemicals), accumulating US$3.9 billion, or 30% of total capital raised in the region;

financial services, worth US$3.3 billion and telecommunications, valued at US$2.5 billion. By number of

deals, the top sectors were financial services, with 18 IPOs, or 35% of the total number of deals in the

region, industrials with 12 deals and real estate with 5 offerings.

The growth was fuelled by record levels of foreign direct investment and softening of regulations to

open up the Middle East markets to international investors. According to most of the analysts, it would take

some time for foreign investors to return to the region because of their domestic losses and continued

volatility in emerging markets. In 2010, the Middle East IPO markets saw a flat trend with 35 IPOs worth a

total of US$ 3.3 billion, a 59% increase from 2009 by capital raised. Africa also saw a jump of over 406%in

total proceeds, with 13 IPOs worth US$ 1.6 billion.

Insert Fig. 6 here

3. Material and Methods

The study is conducted based on data collected from the World Federation of Stock Exchanges

(WFSE), Global New Issues database published by Securities Data Company (SDC), National Stock

Exchange database (India) and WDI database published by World Bank. For each IPO, the database gives

detailed information on the issuer, the issue date, total proceeds, the number and type of shares offered and

the offer price. Moreover, information regarding the nature of the issue, either domestic or contains an

international tranche, and whether or not a tranche is offered to public or private investors are also

considered for the study. The transactions only which satisfy the benchmark set for the study, between April

2003 and March 2010, are then considered.

In respect to analysis of regressions, the dependent variable is considered as a measure of IPO activity.

For each country and in each year, the number of IPOs as well as the total proceeds raised through such




Vol 2, No 4, 2011

107

process is computed. To calculate the IPO numbers and proceeds, the domestic IPOs are differentiated from

the global IPOs in the country of domicile are considered. Listed domestic companies include domestically

incorporated companies listed on the country’s stock exchanges at the end of the year and do not include

investment companies, mutual funds, REITs or other collective investment vehicles. GDP is reported in

current US dollars converted from domestic currencies using the year-end official exchange rate for that

country.

An important set of data in the study are country-specific institutional variables related to the quality

of investor, legal protections and securities laws related to disclosure requirements and enforcement

standards. From LLSV (1998), countries governed by common law have better organized institutions and as

such, we have used the common law as a dummy variable. A popular index of legal protections for minority

investors is the anti-director rights index of LLSV. DLLS (2008) has introduced an index of anti-self

dealing to address the ways in which the law deals with corporate self-dealing in a more theoretical way.

According to LLS (2006), securities laws that authorize prospectus disclosure and liability benefit stock

market development, including the breadth, size, and liquidity of the market. These measures are especially

useful for our study as they relate closely to the security issuance process through IPOs. They have also

suggested disclosure requirements index with components related to requirements for prospectuses, and for

providing information on compensation of directors and key officers, the issuer’s ownership structure,

related-party transactions with directors, officers or large block holders, and the presence of contracts

outside the ordinary course of business. The liability standard index comprises measures of four liability

standards in cases against issuers and directors, distributors, and accountants. The index of public

enforcement is based on five broad aspects of public enforcement: the basic characteristics of the

supervisory body for securities markets, the scope of its powers to regulate markets, its investigative

powers, its power to issue non criminal sanctions for violations of securities laws against issuers

distributors, and accountants, and whether, to whom, and when criminal sanctions for violations of

securities laws apply. Finally, LLSV (1998) has built an all-encompassing investor protection index which

comprises the first principal component of the burden of proof, disclosure, and the anti-director rights index.

We have also included a measure of the rule of law from the World Bank’s World Governance Indicators

database and political risk from the International Country Risk Guide (ICRG) database built by The PRS

Group Inc. In contrast to the LLSV and DLLS, these variables are measured every year.

A key mechanism through which poor institutions limit IPO activity is that they require more

co-investment by insiders at the IPO. Consequently, fewer IPOs are expected in countries where ownership

is optimally more concentrated. We have used a measure of ownership concentration from LLSV to

compute the average percentage of shares owned by the top three shareholders of the ten largest,

non-financial, private domestic firms in a country. In our regressions, to measure the level of economic

development in the country, we have used the log of GDP per capita (Log GDP / capita). This variable is

obtained from the WDI Database. For measuring financial market development, we have applied the

updated index of the Financial Development and Structure database, originally used in Beck and Levine

(2000). Data are also collected to measure market turnover ratio and market capitalization as a percentage

of GDP.

To accomplish control over the local market conditions as a factor in the going-public decision, we

have computed a country level measure of Tobin’s q in each year. The country-level measure of q is the




Vol 2, No 4, 2011

108

weighted average of the median industry qs at market value. This is constructed analogously to the local

growth opportunities based on P/E ratios as used by Bekaert, Harvey, Lundblad, and Siegel (2007). To

capture global growth opportunities, we have also formed a global measure of q. For each year, the median

q and the relative market value for each global industry are computed. Global q, thus represents the

weighted average of global median of industry qs at market value. This measure is similar to the global

growth opportunities (GGO) measure as enunciated by Bekaert et al.

Finally, to put in order the unobservable global macroeconomic and capital market factors that

influence IPO activity around the world, a world IPO factor is constructed. The domestic IPOs (World

domestic IPO rate) and global IPOs (World global IPO rate) are measured in terms of IPO numbers per

listed firms and in terms of IPO proceeds per GDP. To compute the world IPO rate for a given country, the

IPO activity and the scale factor of that country are, however, excluded.

3.1 The IPO Sample: 2004 to 2010

The initial sample is comprised of 15017 observations, of which transactions with a single domestic

tranche that SDC qualifies as private placement (32 observations), 138 observations with a gap of 30 days

or more between issue dates and 27 transactions that do not contain any information on proceeds raised are

not considered. The data of some IPOs (859 observations), which are recorded over multiple lines in SDC,

even if there is only one tranche in the offering, are consolidated and excluded. Some foreign, including

global offers (2967 observations), recorded over multiple lines in SDC are consolidated into one line and

kept out of the study. We have also barred 41 transactions that do not have SIC codes, leaving us with

10953 observations, each of which represents a unique IPO.

To construct our final sample, we have left out an additional 803 IPOs, dropped 452 IPOs by real

estate investment trusts (REITs) and investment funds, 44 IPOs where the country of origin has no data

(Angola, Barbados, Cambodia, Dominican Republic, Faroe Islands, Georgia, Ghana, Iceland, Kazakhstan,

Lebanon, Macau, Malta, Netherlands Antilles, Slovenia, Ukraine, and Uruguay) and 28 IPOs from 16

countries without any domestic IPOs (only global IPOs) during the 7-year sample period. The final sample

thus contains 9626 IPOs of which 7028 are domestic and 2598 are foreign (international offerings with no

domestic tranche) and global offers (both domestic and foreign tranches included). In Table: 1, while the

first part shows IPOs based on numbers the second deals with the total IPO proceeds. Domestic IPO

proceeds do not include proceeds raised in the domestic tranche of global IPOs. For global IPOs, however,

the panel considers the total proceeds raised through global IPOs (proceeds raised in the domestic and

international tranches) and global proceeds raised in global IPOs (proceeds raised in the international

tranches only). The IPO proceeds are computed in terms of US dollars (billions) in 2010.

Insert Table-1 here

3.2 IPO Activity in Selected Countries around the World: 2004 to 2010

The IPO data is obtained from SDC and includes 9626 IPOs during 2004 to 2010. While Part I

demonstrates the top five countries based on total IPO counts, the top five countries based on total IPO

proceeds are shown in Part II. In this context, domestic IPO proceeds do not include proceeds raised

through domestic tranche of global IPOs. For global IPOs the panel reports total proceeds raised in global

IPOs (proceeds raised in the domestic and international tranches) and global proceeds raised in global IPOs

(proceeds raised in the international tranches only). Proceeds are in constant 2010 U.S. dollars (billions).

Insert Table-2 here




Vol 2, No 4, 2011

109

4. Results

4.1 Descriptive Statistics

The following table demonstrates the average value of each variable of the selected countries. The

sample is restricted to five countries based on availability of data for GDP and for country q data are

restricted to for at least one year during the sample period from 2004-2010. Each variable is then averaged

across years within a given country and across the countries.

Insert Table-3 here

4.2 Regression Statistics

The annual measure of global IPO activity of each country is selected as dependent variable here. The

IPO data is composed from SDC and includes 2598 global IPOs that have data available for GDP and

country q for at least one year during the sample period from 2004 to 2010. For each country, global IPO

numbers and proceeds are summed annually. Part-I shows the regression of the data where the dependent

variable is the annual global IPO number of each selected country scaled by the total number of IPOs

during that year. On the other, Part-II shows the regression analysis, where the global IPO proceeds scaled

by the total number of IPO proceeds during that year is referred to as the dependent variable. The global

IPO proceeds, here also, do not include proceeds from the domestic tranche of the IPO. Both measures of

global IPO activity are subsequently multiplied by 100. The dependent variable is not taken into account, if

there is no IPO in a country during any given year. The world IPO rates are computed based on numbers

(proceeds). The domestic IPO rate and world domestic IPO rate include total domestic proceeds. All

variables are lagged by one year except the institutions variable.

The dependent variable is each country’s annual measure of global IPO activity. IPO data is from SDC

and includes 2598 global that have data available for GDP and for country q for at least one year during the

sample period from 2004 to 2010. For each country, global IPO numbers and proceeds are summed

annually. Tables 4, 6, 8 & 10shows regressions where the dependent variable is each country’s annual

global IPO count scaled by the total number of IPOs that year. Tables 5, 7, 9 & 11 shows regressions where

the dependent variable is each country’s annual global IPO proceeds scaled by the total number of IPO

proceeds that year. Global IPO proceeds do not include proceeds from the domestic tranche of the IPO.

Both measures of global IPO activity are multiplied by 100. The dependent variable is set to missing if

there are no IPOs in a given country in a given year. The world IPO rates are based on numbers (proceeds).

The domestic IPO rate and world domestic IPO rate include total domestic proceeds. With the exception of

the institutions variables, all variables are lagged by one year. Post 2008 is a dummy that equals one from

2008 to 2010.

5. Results and Discussion

The results obtained through panel regressions are based on global IPO numbers and proceeds. The

numbers of global IPOs include foreign IPOs and global IPOs with a domestic and international tranche.

These numbers are deflated by the total number of IPOs, both domestic and global IPOs. The global IPO

proceeds, on the other, are determined by deflating the total IPO proceeds, including domestic and global.

This process has helped us to determine and evaluate how intensively the firms in a country pursue the

global opportunities.




Vol 2, No 4, 2011

110

We have also considered in the base specifications some additional factors to account for the changing

landscape of the global economic and capital market environment. Moreover, efforts are also made to

identify exclusively the factors influencing the unique country-level global IPO activity to control for the

level of global IPO activity in that country. The world global IPO rate (in terms of number) is measured in

terms of global IPO numbers per listed firms and global IPO proceeds per GDP. The world domestic IPO

rate is also included as is the actual domestic IPO activity rate in the country of interest. To avoid possibly

spurious findings, these variables are lagged by one year, as are all other control variables. To capture the

influence of differences in local country-specific growth opportunities and global growth opportunities, we

have included country q and global q in our regressions. For correlating these variables, we have interpreted

the coefficient on the global q ratio as a measure of growth opportunities that is independent of a country’s

institutions.

In the regressions displayed in the first columns of Tables 4, 6, 8 & 10for global IPO numbers and of

Panel-II for global IPO proceeds, it is observed that the coefficient on the global IPO factor is reliably

positive and economically large. This is what we would expect to observe if there are important

macroeconomic cyclical factors as well as common long-term secular forces of financial crisis of capital

markets that influence global IPO activity across all markets. In Tables 4, 6, 8 & 10, the coefficient of 4.231

implies that a one standard deviation increase in global IPO activity worldwide is associated with a 3.87%

increase in global IPO numbers in a country, which represents 10% of the standard deviation of global IPO

activity. The equivalent coefficient for global IPO proceeds in Tables 4, 6, 8 & 10 is also significant and

economically large. We have also located reliable evidence that the level of domestic IPO activity is

negatively related to the fraction of IPO numbers and proceeds that are global. However, the economic

importance of this relationship is even larger. For counts in Tables 4, 6, 8 & 10, the coefficient on the

domestic IPO rate is -2.148 which implies that standard deviation increase in domestic IPO numbers per

listed companies is associated with a 11.4% decrease in the fraction of IPOs that are global, which is about

31% of the standard deviation of global IPO activity. The economic importance of the negative influence of

domestic IPO activity by proceeds is found much smaller. We also encounter that market turnover is

negatively related to the intensity of global IPO activity by numbers and proceeds – both of which are

reliable indicators to establish that robust domestic IPO activity is associated with fewer and less global

IPO activity, not more. None of the other variables explanatory, though the positive coefficient on log (GDP

/ capita) is marginally significant for global q in respect to global IPO proceeds. The overall explanatory

power of the base specification is reasonably good for the global IPO proceeds (adjusted R2 of 11%), and

even better for global IPO counts (adjusted R2 of almost 15%).

5.1 The Importance of Global IPO Activity

In the first regressions, we have added one national institutions proxy variable in each subsequent

column in both panels. This has done to determine whether legal protections for minority investors,

securities laws, disclosure rules, and their enforcement in a country influence the intensity with which firms

pursue global IPOs, even after controlling for the overall level of domestic and global IPO activity, growth

opportunities, and market conditions. We have found a reliable and important negative relationship for

many of these variables. For example, where countries with better anti-director rights are associated with

much less global IPO activity, the negative coefficient on anti-director of (-) 6.27 in Tables 4, 6, 8 &

10implies a 6.48% lower fraction of global IPO numbers, which accounts for about 16% of its standard




Vol 2, No 4, 2011

111

deviation. The relationship is negative but weaker in Tables 4, 6, 8 & 10 for global IPO proceeds. The study

has also observed a similarly reliable negative relationship for the intensity of global IPO numbers using

the common law dummy as well as the anti-self-dealing, disclosure, and investor protection indexes. There

exists, it is found, a positive relationship between ownership and the extent of global IPO activity and has

been confirmed in the last column of Tables 4, 6, 8 & 10.

The statistical and economic significance of the national institutions proxy variables are often weaker

in regressions for the intensity of global IPO activity by proceeds in Tables 4, 6, 8 & 10 than in the count

regressions in Tables 4, 6, 8 & 10, and the results are found mostly consistent in both the panels. Again,

while the institution variables generally have significant positive coefficients for domestic IPO proceeds, a

significant negative or insignificant coefficient has also been found for the global IPO proceeds regressions.

As in Tables 4, 6, 8 & 10 for the global IPO count, disclosure and investor protection, though having

reliably negative coefficients, are considered as the most reliable national institutions variables. The

coefficient of -21.52 on disclosures implies a higher score of one standard deviation with a 6.14% decline

in the fraction of IPO proceeds that are global offerings, which represents about 19% of its standard

deviation. The rule of law is negatively related to the global fraction of IPO proceeds where ownership is

positively related, as expected. The common law dummy, the anti-director rights index and the

anti-self-dealing index have negative coefficients, though found significant only at the 10% level. It is

identified in the previous section that national institutions became less important determinants of domestic

IPO activity in the second half of our sample, however, it is to be investigated whether the same result

holds good for global IPOs as well.

5. 2 Comparing Global IPO Activity between Pre-crisis and Post-crisis

We have developed the same base design for our panel regressions as in the previous section, but have

introduced a dummy variable for the post-crisis (post-2008) period and allowed this variable to interact

with the proxy variable for the quality of national institutions in each additional specification. In the first

specification in Tables 4, 6, 8 & 10, the Post-2008 dummy variable is found insignificant, which implies

that there is no important shift across sub-periods in the overall fraction of IPO numbers that are global. It

has also observed the same result for the first specification in Tables 4, 6, 8 & 10 for the fraction of IPO

proceeds that are global. However, when other national institution variables are introduced, we have

uncovered the expected negative relation that is established in Tables 4, 6, 8 & 10. It is opined that the

higher is the quality of a country’s institutions; the lower is the fraction of IPO numbers that are global. The

interactions of the institutions variables with the Post-2008 dummy variable are significant and of the

predicted sign, but for only three variables: anti-director, anti-self dealing, and ownership. In other words,

the importance of the quality of a country’s institutions is weakened for some institutions variables, but

clearly not for the majority of them. When the effect of an institution is weakened, the modification is

found economically significant considering the statistically significant and negative coefficient on the

anti-director index of 10.628. This coefficient implies an 11.66% lower fraction of global IPO numbers

during pre-2008, which accounts for 30% of its standard deviation. But the positive, significant coefficient

of 6.188 on the interaction variable with the post-2008 dummy implies only a 4.87% lower fraction of

global IPO numbers, such reversal effects during the period of 2008 are similarly remarkable for

anti-self-dealing index and, to a similar extent, for ownership variable.

It is found by the results of IPO proceeds in Tables 4, 6, 8 & 10, the importance of common law




Vol 2, No 4, 2011

112

decreases during 2008 instead of anti-director index, which was expected. For countries, with common law

origins, our analysis indicates that there is a 16.31% lower fraction of total IPO proceeds raised globally.

During the same period, the positive coefficient on the interaction of the common law dummy with the

Post-2008 dummy results a fall in global proceeds to only a 6.2% lower fraction of total IPO proceeds.

Global IPOs, as is said, are avenues for firms to exploit the best of the global investors in the form of

better institutions, both domestic and global, to have a successful or more profitable IPO. The advantage of

the institutions of foreign countries, however, is inversely related to the quality of a firm’s domestic

institutions, and as such, it is not surprising that domestic institutions play an opposite role for global and

domestic IPOs. It is also evidenced in respect to both domestic and global IPOs that domestic institutions

become less significant during post-crisis period than during the pre-crisis periods. This evidence is

substantially more prominent for domestic IPOs than global IPOs. A possible explanation for this finding is

that financial crisis has increasingly enabled firms whose value is most closely tied to the quality of

institutions to use global IPOs and to take advantage of the institutions from foreign countries.

6. Conclusions

This study aspires to make a sincere attempt on the global and domestic IPO activity and has

observed a dramatic change in the IPO landscape around the globe. Global IPOs have proved themselves to

become more important, whether one looks at numbers or at proceeds. In fact, global IPOs have played a

critical role in increasing the importance of IPOs by domestic firms, as firms in countries with weaker

institutions are less likely to go public with a domestic IPO rather in a global IPO. Thus, global IPOs enable

firms always make efforts to overcome poor institutions in their country of origin. Perhaps as a result, the

laws and institutions of such countries become significantly less important in affecting the rate and velocity

of IPO activity. The global drivers used to make a significant contribution in encouraging domestic IPO

activity. As such, higher levels of global IPO activity outside a country are not strongly and positively

related to the level of global IPO activity in that country. However, global IPO activity is also related to

domestic market conditions. Firms are more likely to choose to go public at home when valuations are

higher in the home market. Finally, our focus is resolutely on cross-country variation in global IPO activity,

but as a result we highlight the decreasing role of domestic IPOs in the post-crisis periods.

References

Allen F. and G. Faulhaber (1989). Signaling by Underpricing in the IPO Market, Journal of Financial

Economics; 23: 303-23.

Beck and Levine (2000). Levine-Loayza-Beck Data Set: Financial Intermediation and Growth, The World

Bank Group, 1-3.

Bekaert, G., C. R. Harvey, C. Lundblad, and S. Siegel (2007). Growth Opportunities and Market Integration,

Journal of Finance, 62, 1081-1137.

Black, Bernard S., and Ronald J. Gilson (1998). Venture Capital and the Structure of Capital Markets:

Banks versus Stock Markets, Journal of Financial Economics 47, 243-277.

Bloomberg, Various Issues

Doidge, Craig, G. Andrew Karolyi, and René M. Stulz (2007). Why Do Countries Matter So Much For

Corporate Governance? Journal of Financial Economics 86, 1-39.

Doidge, Craig, G. Andrew Karolyi, and René M. Stulz (2011). The U.S. Left Behind: The Rise of IPO




Vol 2, No 4, 2011

113

Activity Around the World Charles A. Dice Center for Research in Financial Economics, Dice Center WP

2011-8, Fisher College of Business WP 2011-03-008

Doidge, Craig, G. Andrew Karolyi, and René M. Stulz (2009). Has New York Become less Competitive

than London in Global Markets? Evaluating Foreign Listing Choices over Time, Journal of Financial

Economics 91, 253-277.

Henderson, Brian, Narasimhan Jegadeesh, and Michael S. Weisbach, (2006). World Markets for Raising

New Capital, Journal of Financial Economics 82, 63-101.

Helwege, Jean and Nellie Liang (2001). Initial Public Offering in Hot and Cold Market”, Working Paper,

Federal Reserve Board of Finance and Economics, Discussion Series.

Hoffmann-Burchardi, Ulrike (2001). Clustering of Initial Public Offering, Information Revelation and

Underpricing, European Economic Review. 45(2) 353-83.

Ibbotson, Roger G. and Jeffrey F. Jaffe (1975). Hot Issue Markets, Journal of Finance, 30, 1027-1042.

Ibbotson, Roger G., Jody L. Sindelar, and Jay R. Ritter (1988). Initial Public Offerings, Journal of Applied

Corporate Finance, 1, 37-45.

Ibbotson, Roger G., Jody L. Sindelar, and Jay R. Ritter (1994). The Market’s Problems with the Pricing of

Initial Public Offerings, Journal of Applied Corporate Finance, 7(1), 66-74.

International Monetary Fund (2008), Global Financial Stability Report, October, Washington D.C.

International Country Risk Guide (ICRG) database, Various Issues

Jain, Bharat A., Kini, Omesh (1994). The Post Issue Operating Performance of IPO Firms, Journal of

Finance; 49(5), 1699-1726.

Lowry, Michelle and G. William Schwert (2002). IPO Market Cycles: Bubbles or Sequential Learning,

Journal of Finance, 57, 1171-1200.

National Stock Exchange database (India), Various Issues

Perron, P (1993). Erratum - The Great Crash, the Oil Price Shock and the Unit Root Hypothesis,

Econometrica, 61(1), 248-49.

Ritter, Jay R. (1984). The Hot Issue Market of 1980, Journal of Business, 57(2), 215-240.

Ritter, Jay R (1991). The Long Run Performance of Initial Public Offerings, Journal of Finance, 46(1), 3-

27.

Shah, Ajay (1995). The Indian IPO Market: Empirical Facts and Technical Report, Centre for Monitoring

Indian Economy, Mimeo

Shleifer, Andrei, and Daniel Wolfenzon (2002). Investor Protection and Equity Markets, Journal of

Financial Economics 66, 3-27.

Stulz, René M. (2009). Securities Laws, Disclosure, and National Capital Markets in the Age of Financial

Globalization, Journal of Accounting Research 47, 349-390.

WDI database published by World Bank. Various Issues

World Federation of Stock Exchanges (WFSE), Various Issues




Vol 2, No 4, 2011

114

Table-1: The IPO sample: 2004 to 2010

Part-I IPO Numbers

Year All IPOs Domestic IPOs Global IPOs

2004

2005

2006

2007

2008

2009

2010

Total

1529

1473

1679

1850

884

695

1516

9626

1297

1223

1314

1116

587

502

989

7028

232

250

365

734

297

193

527

2598

Part-II IPO Proceeds

2004

2005

2006

2007

2008

2009

2010

Total

$133.8

$149.4

$223.7

$278.6

$111.5

$115.0

$355.0

$1367.0

$62.2

$82.6

$121.6

$89.9

$63.3

$73.0

$227.0

$719.6

$71.6

$66.8

$102.1

$188.7

$48.2

$42.0

$128.0

$647.4

Table-2: IPO activity for the top 5 countries around the world: 2004 to 2010

Part-I IPO Numbers

Countries All IPOs Domestic IPOs Global IPOs

US

China

Europe

India


Total of top 5

Rest of the World

Total of all countries

1151

1238

2409

366

479

5643

3983

9626

846

935

1976

348

413

4518

2510

7028

305

303

433

18

66

1125

1473

2598




Vol 2, No 4, 2011

115

Part-II IPO Proceeds

US

China

Europe

India


Total of top 5

Rest of the World

Total of all countries

$285

$351

$361

$36

$53

$1086

$281

$1367

$149

$207

$234

$21

$37

$648

$71.6

$719.6

$136

$144

$127

$15

$16

$438

$209.4

$647.4

Table-3: Descriptive Statistics

Variables Mean Median S.D. 1st Quartile 3

rd Quartile

V1

V2

V3

V4

V5

V6

V7

V8

V9

V10

V11

V12

V13

V14

V15

V16

V17

V18

V19

V20

V21

V22

V23

V24

47.92

45.70

3.68

0.15

0.24

0.74

0.11

2.49

0.20

0.30

3.44

0.48

0.62

0.48

0.51

0.48

73.49

0.76

0.46

1.27

1.25

0.59

0.58

8.88

49.28

44.59

3.73

0.15

0.24

0.73

0.11

1.16

0.15

0.00

3.50

0.44

0.58

0.44

0.55

0.46

75.68

0.86

0.51

1.29

1.26

0.43

0.48

9.28

26.63

20.76

0.23

0.003

0.004

0.03

0.01

2.85

0.18

0.46

1.12

0.24

0.21

0.25

0.22

0.23

11.62

0.92

0.13

0.19

0.00

0.52

0.49

1.38

25.00

32.82

3.71

0.15

0.24

0.73

0.12

0.35

0.07

0.00

3.00

0.29

0.50

0.22

0.33

0.35

66.07

-0.01

0.39

1.18

1.26

0.22

0.23

7.97

69.61

57.46

3.75

0.15

0.24

0.74

0.12

3.88

0.26

1.00

4.00

0.64

0.75

0.66

0.67

0.61

83.52

1.64

0.56

1.36

1.26

0.82

0.72

10.13




Vol 2, No 4, 2011

116

Table-4: Global IPO numbers scaled by total number of IPOs

C

Common

law

Anti-director Anti-self

dealing

Disclosure Burden of

proof

Constant -5.65

(-0.47)

4.31

(0.30)

13.93

(2.04)

6.34

(0.06)

11.55

(0.89)

-0.07

(-0.001)

Institutions variable

-

-

-6.27**

(-1.08)

4.78***

(-1.18)

-16.05**

(-1.52)

-21.52***

(-1.33)

-8.28

(-1.22)

Domestic IPO rate

-2.148

(-4.26)

-1.10***

(-2.89

-2.34***

(-3.27)

-2.97***

(-3.26)

-1.64***

(-2.94)

-2.80***

(-3.16)

World domestic IPO rate 0.687

(0.98)

0.20**

(1.87)

1.32**

(2.32)

1.18**

(0.04)

0.56*

(0.79)

0.86*

(1.77)

World global IPO rate 7.624

(1.89)

8.24***

(2.03)

3.71***

(2.40)

3.15***

(1.26)

0.610**

(1.03)

6.75***

(1.88)

Country q 4.231

(0.76)

1.76

(0.34)

0.57

(0.34)

2.21

(0.60)

2.90

(0.64)

6.22

(1.07)

Global q

6.723

(0.34)

1.34

(0.57)

7.494

(0.37)

4.54

(0.27)

3.04

(0.31)

4.33

(0.07)

Market cap / GDP

-3.684

(-0.94)

0.16

(0.01)

0.31

(0.17)

-0.32

(-0.01)

2.86

(1.01)

-0.68

(-0.27)

Market turnover

-4.874

(-1.63)

-3.37***

(-1.04)

-3.11**

(-1.39)

-3.59**

(-1.05)

-3.35***

(-1.87)

-3.98***

(-2.07)

Log (GDP / capita)

1.986

(1.08)

1.34

(0.25)

2.28

(0.66)

2.92

(1.03)

0.99

(0.65)

3.43**

(1.07)

Number of observations 200 200

200

200

200

Adjusted R2 0.2127 0.3258 0.2036 0.2697 0.2438

Table-5: Global IPO proceeds scaled by total IPOs proceeds

Common

law


dealing


proof

Constant -13.59

(-0.61)

-8.67

(-0.37)

-3.76

(-0.19)

-8.06

(-0.68)

4.99

(0.19)

-9.62

(-0.79)


-

-

-6.33*

(-1.37)

-2.16*

(-0.92)

-7.97*

(-1.15)

-22.88***

(-3.99)

-6.31

(-1.10)

Domestic IPO rate

-6.87***

(-2.82)

-7.46***

(-2.85)

-6.76***

(-2.14)

-9.64***

(-1.84)

-10.24***

(-4.24)

-8.37**

(-4.53)




Vol 2, No 4, 2011

117


(0.05)

6.42

(0.35)

7.34

(0.81)

8.06

(0.27)

7.84

(0.41)

8.97

(0.62)

World global IPO rate 37.85***

(1.81)

34.76**

(1.19)

36.33**

(1.32)

34.73**

(2.36)

20.87*

(1.71)

31.97*

(1.99)

Country q -2.17

(-0.72)

-2.52

(-0.60)

-4.77

(-1.06)

-0.67

(-0.18)

-5.257

(-0.94)

-2.866

(-0.48)

Global q

20.06*

(1.06)

23.66*

(1.00)

25.43**

(1.15)

31.78**

(1.05)

25.34*

(2.00)

43.550*

(1.99)

Market cap / GDP

0.22

(0.002)

3.67

(1.04)

1.35

(0.52)

2.13

(0.27)

8.95**

(2.24)

3.38

(0.83)

Market turnover

-5.73***

(-4.19)

-7.28***

(-3.11)

-6.24**

(-2.37)

-7.20**

(-4.85)

-8.82***

(-5.36)

-9.60***

(-6.30)

Log (GDP / capita)

1.81*

(1.10)

0.85

(0.49)

0.58

(0.86)

1.71

(0.85)

1.13

(0.69)

2.34

(1.38)

Number of observations 200 200 200 200 200 200

Adjusted R2 0.1128 0.1389 0.1298 0.1276 0.1506 0.1211

The t-statistics (in parentheses) are adjusted for clustering on countries – they are computed assuming

observations are independent across countries, but not within countries. *t-statistic is significant at 10%

level of significance, ** t-statistic is significant at 5% level of significance and *** t-statistic is significant

at 1% level of significance.

Table-6: Global IPO numbers scaled by total number of IPOs

Public

enforce

Investor

protection

Political

risk

Rule of

law

Ownership

Constant 1.628

(0.04)

11.187

(0.30)

-6.444

(-0.20)

-33.104

(-0.91)

-85.898**

(-2.43)


-12.291

(-0.73)

-24.561**

(-2.44)

0.163

(0.45)

-6.962

(-1.67)

97.302***

(6.14)

Domestic IPO rate

-3.888***

(-6.43)

-3.751***

(-6.56)

-3.362***

(-6.33)

-3.199***

(-5.57)

-3.429*

(-6.12)

World domestic IPO rate 1.001*

(1.72)

1.061*

(1.85)

1.159**

(2.06)

1.284**

(2.27)

1.334**

(2.36)

World global IPO rate 12.064***

(3.02)

11.675***

(2.86)

14.209***

(3.53)

12.351***

(3.03)

11.270***

(2.89)

Country q 8.875

(1.28)

8.566

(1.28)

6.551

(1.06)

8.102

(1.35)

9.748

(1.54)




Vol 2, No 4, 2011

118

Global q

6.975

(0.27)

5.207

(0.21)

9.250

(0.40)

5.372

(0.23)

0.708

(0.03)

Market cap / GDP

-1.660

(-0.39)

0.869

(0.22)

-5.200

(-1.22)

-5.278

(-1.34)

-2.182

(-0.65)

Market turnover

-7.380***

(-3.12)

-7.347***

(-3.14)

-6.007**

(-2.20)

-6.910**

(-2.61)

-0.297

(-0.15)

Log (GDP / capita)

3.540*

(1.79)

3.201*

(1.76)

2.303

(0.65)

7.761**

(2.54)

7.670***

(5.11)


200

200

200

Adjusted R2 0.2593 0.2729 0.2353 0.2444 0.3369


Public

enforce

Investor

protection

Political

risk

Rule of

law

Ownership

Constant -29.327

(-0.89)

-17.083

(-0.56)

-22.337

(-0.78)

-67.968*

(-2.00)

-102.1***

(-3.08)


-2.972

(-0.20)

-18.615**

(-2.06)

-0.264

(-0.74)

-8.643**

(-2.45)

78.190***

(5.26)

Domestic IPO rate

-18.71***

(-4.20)

-17.52***

(-4.37)

-16.59***

(-4.24)

-15.01***

(-3.84)

-17.27***

(-4.32)


(0.65)

10.360

(0.55)

14.306

(0.77)

11.988

(0.67)

11.894

(0.65)

World global IPO rate 46.194**

(2.07)

43.244*

(1.93)

51.947**

(2.42)

37.874*

(1.73)

32.786

(1.49)

Country q -2.595

(-0.42)

-2.780

(-0.46)

-3.173

(-0.57)

-2.002

(-0.36)

-1.034

(-0.20)

Global q

43.682*

(1.96)

44.084*

(1.98)

42.012*

(2.01)

44.538**

(2.14)

47.743**

(2.02)

Market cap / GDP

2.272

(0.54)

5.003

(1.21)

1.276

(0.34)

0.740

(0.20)

3.114

(1.07)

Market turnover

-9.964***

(-5.99)

-10.05***

(-6.32)

-10.11***

(-6.44)

-10.99***

(-6.38)

-4.312**

(-2.43)

Log (GDP / capita)

2.389

(1.37)

1.741

(1.02)

4.005

(1.32)

7.550***

(2.89)

5.238***

(3.85)

Number of observations 200 200 200 200 200

Adjusted R2 0.1234 0.1371 0.1232 0.1402 0.1958





Vol 2, No 4, 2011

119




Table-8: Global IPO numbers scaled by total number IPOs

Common

law


dealing


proof

Constant

-3.395

(-0.10)

21.830

(0.64)

53.654

(1.59)

27.043

(0.78)

16.258

(0.54)

23.547

(0.82)

Post 2008 -

-

-7.851**

(-2.49)

-27.435***

(-3.05)

13.126**

(-2.34)

-4.234**

(-1.84)

-12.314**

(-2.13)

Institutions variable -

-

-20.947***

(-2.82)

-10.628***

(-3.37)

-35.028***

(-2.98)

-19.547***

(-2.01)

-32.658***

(-1.84)

Institutions*Post 2008 -2.224

(-0.68)

9.011

(1.55)

6.188**

(2.58)

16.149*

(1.77)

8.564

(1.14)

12.569*

(1.24)

Domestic IPO rate

-3.326***

(-5.92)

-3.066***

(-5.91)

-3.366***

(-7.51)

-2.960***

(-5.26)

-2.952***

(-4.57)

-2.058***

(-4.35)

World domestic IPO

rate

0.769

(1.27)

0.599

(1.03)

0.656

(1.12)

0.617

(1.04)

0.847

(0.875)

0.554

(0.93)


(3.44)

13.555***

(3.40)

14.400***

(3.61)

13.782***

(3.46)

11.247***

(2.54)

10.548***

(2.64)

Country q 6.962

(1.17)

6.421

(1.02)

2.555

(0.44)

4.960

(0.76)

5.986

(0.99)

3.621

(0.67)

Global q

0.227

(0.32)

2.853

(0.12)

5.918

(0.26)

3.698

(0.16)

2.367

(0.07)

2.687

(0.14)

Market cap / GDP

-5.327

(-1.26)

0.718

(0.17)

0.973

(0.24)

0.266

(0.06)

0.652

(0.14)

0.326

(0.09)

Market turnover

-6.620

(-2.49)

-7.534***

(-2.78)

-6.434**

(-2.41)

-6.437**

(-2.42)

-6.884***

(-2.41)

-4.875**

(-1.88)

Log (GDP / capita)

3.937

(1.97)

2.343

(1.25)

2.330

(1.30)

2,964

(1.41)

2.008

(0.87)

2.669

(1.08)

Number of observations 200

200

200

200

200

200

Adjusted R2 0.2383

0.2701 0.2788 0.2584 .02601 0.2487


Common Anti-director Anti-self Disclosure Burden of




Vol 2, No 4, 2011

120

law dealing proof

Constant -2.882

(-0.17)

-31.24

(-0.96)

-9.67

(-0.50)

-15.36

(-0.58)

-45.26*

(-1.84)

-98.32***

(-2.77)

Post 2008

-

-

-2.087

(-0.12)

-15.355**

(-1.67)

-0.305

(-0.85)

-7.652**

(-2.13)

74.585***

(4.98)


-

-

-11.57***

(-3.89)

-14.237***

(-3.66)

-14.35***

(-3.99)

-12.34***

(-3.02)

-15.86***

(-3.65)

Institutions*Post 2008 -1.995

(-0.54)

11.258

(0.52)

9.689

(0.47)

11.658

(0.68)

9.657

(0.63)

10.352

(0.70)

Domestic IPO rate

-2.874***

(-4.34)

41.697**

(1.98)

37.589*

(0.88)

46.357**

(2.04)

32.547*

(1.24)

30.643

(1.18)


(1.03)

-3.024

(-0.48)

-2.054

(-0.56)

-4.001

(-0.66)

-1.884

(-0.29)

-1.147

(-0.26)


(2.65)

38.635*

(1.25)

40.214*

(1.34)

39.231*

(1.74)

41.366**

(1.83)

44.698**

(1.84)

Country q

-6.107

(1.14)

-7.227

(1.68)

-6.247

(1.54)

2.441

(0.56)

1.114

(0.58)

3.294

(1.86)

Global q

1.684

(-0.89)

-14.358***

(-4.24)

-5.24***

(-2.17)

-8.269***

(-4.221)

-2.356***

(-1.87)

-4.323**

(-3.54)

Market cap / GDP

4.772

(0.98)

2.658

(0.68)

4.854

(0.87)

1.200

(0.30)

0.652

(0.18)

4.021

(1.21)

Market turnover

0.234

(0.27)

-10.005***

(-3.88)

-9.36***

(-4.96)

-9.621***

(-5.32)

-9.682***

(-5.47)

-3.654**

(-2.04)

Log (GDP / capita)

3.004

(1.46)

2.304

(1.21)

1.587

(1.26)

5.005

(1.04)

6.895***

(2.47)

4.265***

(3.12)


200

200

200

200

Adjusted R2 0.2187 0.1189 0.1293 0.1249 0.1357 0.1827





Table- 10: Global IPO numbers scaled by total number of IPOs

Public

enforce

Investor

protection

Political

risk

Rule of

law

Ownership

Constant 0.63

(0.04)

9.19

(0.30)

-6.44

(-0.20)

27.11

(-0.91)

-66.55**

(-2.43)

Post 2008 -12.291

(-0.73)

-24.561**

(-2.44)

0.163

(0.45)

-6.962

(-1.67)

97.302***

(6.14)




Vol 2, No 4, 2011

121


-3.888***

(-6.43)

-3.751***

(-6.56)

-3.362***

(-6.33)

-3.199***

(-5.57)

-3.429*

(-6.12)

Institutions*Post 2008 1.001*

(1.72)

1.061*

(1.85)

1.159**

(2.06)

1.284**

(2.27)

1.334**

(2.36)

Domestic IPO rate

12.064***

(3.02)

11.675***

(2.86)

14.209***

(3.53)

12.351***

(3.03)

11.270***

(2.89)


(1.28)

8.566

(1.28)

6.551

(1.06)

8.102

(1.35)

9.748

(1.54)


(0.27)

5.207

(0.21)

9.250

(0.40)

5.372

(0.23)

0.708

(0.03)

Country q -1.660

(-0.39)

0.869

(0.22)

-5.200

(-1.22)

-5.278

(-1.34)

-2.182

(-0.65)

Global q

-7.380***

(-3.12)

-7.347***

(-3.14)

-6.007**

(-2.20)

-6.910**

(-2.61)

-0.297

(-0.15)

Market cap / GDP

3.540*

(1.79)

3.201*

(1.76)

2.303

(0.65)

7.761**

(2.54)

7.670***

(5.11)

Market turnover

-7.534***

(-2.78)

-6.434**

(-2.41)

-6.437**

(-2.42)

-6.884***

(-2.41)

-4.875**

(-1.88)

Log (GDP / capita)

2.343

(1.25)

2.330

(1.30)

2,964

(1.41)

2.008

(0.87)

2.669

(1.08)


200

200

200

200

Adjusted R2 0.2593 0.2729 0.2353 0.2444 0.3369


Public

enforce

Investor

protection

Political

risk

Rule of

law

Ownership

Constant -27.88

(-0.74)

-12.96

(-0.73)

-16.84

(-0.86)

-44.57*

(-2.31)

-94.57***

(-2.83)

Post 2008 -10.441

(-0.84)

-20.354**

(-3.01)

0.185

(0.38)

-5.324

(-2.00)

84.117***

(5.88)


-2.972

(-0.20)

-18.615**

(-2.06)

-0.264

(-0.74)

-8.643**

(-2.45)

78.190***

(5.26)

Institutions*Post 2008 1.744*

(2.03)

1.547*

(1.48)

1.421**

(1.84)

1.567**

(1.97)

1.402**

(2.71)

Domestic IPO rate

-18.71***

(-4.20)

-17.52***

(-4.37)

-16.59***

(-4.24)

-15.01***

(-3.84)

-17.27***

(-4.32)

World domestic IPO rate 11.245 12.547 13.257 9.568 16.004




Vol 2, No 4, 2011

122

(0.92) (0.62) (0.82) (0.59) (0.87)

World global IPO rate 46.194**

(2.07)

43.244*

(1.93)

51.947**

(2.42)

37.874*

(1.73)

32.786

(1.49)

Country q -2.595

(-0.42)

-2.780

(-0.46)

-3.173

(-0.57)

-2.002

(-0.36)

-1.034

(-0.20)

Global q

43.682*

(1.96)

44.084*

(1.98)

42.012*

(2.01)

44.538**

(2.14)

47.743**

(2.02)

Market cap / GDP

2.272

(0.54)

5.003

(1.21)

1.276

(0.34)

0.740

(0.20)

3.114

(1.07)

Market turnover

-7.659***

(-4.89)

-9.566***

(-6.02)

-12.474***

(-5.87)

-13.252***

(-5.62)

-3.896**

(-2.85)

Log (GDP / capita)

1.875

(1.42)

1.563

(1.57)

3.954

(0.99)

6.239***

(3.02)

5.008***

(3.21)


200

200

200

200

Adjusted R2 0.1206 0.1302 0.1189 0.1384 0.1844





Appendix-1

Meaning of the Variables

Variables Derivation

Global IPO number / Total number of

IPOs (V1)

Number of global IPOs in country j in year t / Total number of IPOs in

country j in year t and is multiplied by 100

Global IPO proceeds / Total IPO

proceeds (V2)

Increase in Global IPO proceeds in country j in year t / Total IPO proceeds

raised in country j in year t and is multiplied by 100 (Global IPO proceeds

include proceeds raised in the international tranches only)

World domestic IPO rate (based on

numbers) (V3)

Total number of world domestic IPO in year t / Total number of domestic

listed firms worldwide in year t-1 and is multiplied by 100 (To compute the

world domestic IPO rate for country j, number of domestic IPOs and the

number of domestic listed firms for country j are excluded from the

calculation)

World domestic IPO rate (based on

proceeds) (V4)

Increase in total world proceeds in domestic IPOs in year t / Total worldwide

GDP in year t-1 and is multiplied by 100 (To compute the world domestic IPO

rate for country j, IPO proceeds and GDP for country j are excluded from the

calculation)




Vol 2, No 4, 2011

123

World domestic IPO rate (total

domestic proceeds) (V5)

Total world domestic IPO proceeds in year t / Total worldwide GDP in year

t-1 and is multiplied by 100 (Total world domestic IPO proceeds include

proceeds raised in domestic IPOs and the domestic component of global

IPOs. To compute the world domestic IPO rate for country j, IPO proceeds

and GDP for country j are excluded from the calculation)

World global IPO rate (based on

numbers) (V6)

Total world global IPO numbers in year t / Total number of domestic listed

firms worldwide in year t-1 and is multiplied by 100 (To compute the world

global IPO rate for country j, global IPOs and the number of domestic listed

firms for country j are excluded from the calculation)

World global IPO rate (based on

proceeds) (V7)

Total world global IPO proceeds in year t / Total proceeds of domestic listed

firms worldwide in year t-1 and is multiplied by 100 (To compute the world

global IPO rate for country j, global IPOs and proceed of domestic listed

firms for country j are excluded from the calculation)

Domestic IPO rate (based on counts)

(V8)

Number of Lagged domestic IPO / Number of Lagged domestic firms and is

multiplied by 100

Domestic IPO rate (based on total

domestic proceeds) (V9)

Lagged domestic IPO proceeds / Lagged GDP and is multiplied by 100 (For

this variable, proceeds include total domestic proceeds, including proceeds

raised in domestic IPOs and the domestic component of global IPOs)

Post 2008 (Dummy Variable) Equals one from 2004 to 2010; or zero otherwise.

Common law (V10) Equals one, if a country’s origin of commercial law is English common law;

or zero otherwise.

Anti-director (V11) The index is formed by summing up of: (1) vote by mail; (2) shares not

deposited; (3) cumulative voting; (4) oppressed minority; (5) pre-emptive

rights; and (6) capital to call a meeting (Ranges from zero to six.)

Anti-self dealing (V12) Average of ex ante and ex post private control of self-dealing, where the ex

ante is average of approval by disinterested shareholders and ex ante

disclosure, the ex post is he average of disclosure in periodic filings and ease

of proving wrongdoing

(Ranges from zero to one.)

Disclosure (V13) Arithmetic mean of (1) prospectus; (2) compensation; (3) shareholders; (4)

inside ownership; (5) contracts irregular; and (6) transactions (Ranges from

zero to one.)

Burden of proof (V14) Arithmetic mean of (1) liability standard for the issuer and its directors; (2)

liability standard for distributors; and (3) liability standard for accountants

(Ranges from zero to one)

Public enforcement (V15) Arithmetic mean of (1) supervisor characteristics index; (2) rule-making

power index; (3) investigative powers index; (4) orders index; and (5)

criminal index (Ranges from zero to one.)

Investor protection (V16) Principal component of disclosure, burden of proof, and anti-director rights

(Ranges from zero to one)




Vol 2, No 4, 2011

124

Political risk (V17) Includes 12 weighted variables covering both political and social attributes

(Ranges from zero to 100)

Rule of law (V18) Captures perceptions of the extent to which agents have confidence in and

abide by the rules of society, and in particular the quality of contract

enforcement, property rights, the police and the courts, as well as the

likelihood of crime and violence (Ranges from -1.6753 to 2.0431)

Ownership (V19) Average percentage of common shares owned by the top three shareholders in

the 10 largest non-financial and privately-owned domestic firms in a given

country.

Country q (V20) For each firm in country j, q is computed annually as Total assets less book

value of equity plus market value of equity / Book value of total assets (all

variables in local currency) (For each country, median industry of q’s are

computed annually using the Fama-French 17 industry classification scheme.

The industry of q’s are then weighted by their relative market values in each

year so that country q becomes the market value of the weighted average

median industry q’s)

Global q (V21) For each firm in country j, q is computed annually as Total assets less book

value of equity plus market value of equity / Book value of total assets (all

variables are computed in local currency). (Median of global industry q’s are

computed across all firms worldwide using the Fama-French 17 industry

classification scheme. To compute global q, each global industry q is

weighted by the industry’s relative market value (in USD)

Market Capitalization / GDP (V22) Market capitalization value of listed shares / GDP

Market turnover ratio (V23) Market value of total shares traded / Average of real market capitalization

Log (GDP / capita) (V24) GDP / Population during the middle of any year. (GDP is at current USD)

Source: SDC and WDI database and DLLS (2008)




Vol 2, No 4, 2011

125

Fig. 1

Source:Dealogic, Thomson Financial, Ernst & Young

Fig. 2

Source: Dealogic, Thomson Financial, Ernst & Young




Vol 2, No 4, 2011

126

Fig. 3


Fig. 4


Fig. 5




Vol 2, No 4, 2011

127


Fig. 6



Economy & Finance

9.amalendu bhunia's rjfa 98 127