Business Creation and the Stock Market.

We claim that the stock market encourages business creation, innovation, and growth by allowing the recycling of "informed capital". Due to incentive and information problems, new start-ups face high flotation costs. Sustaining a tight relationship with a monitor allows them to postpone their going public decision until profitability prospects are clearer of incentive problems are less severe.

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Year of publication:	2000
Authors:	Michelacci, C. ; Suarez, J.
Institutions:	Centro de Estudios Monetarios y Financieros (CEMFI)
Subject:	GROWTH RATE \| MARKET \| INFORMATION

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Series:	Centro de Estudios Monetarios Y Financieros-.
Type of publication:	Book / Working Paper
Notes:	41 pages
Classification:	E44 - Financial Markets and the Macroeconomy ; G32 - Financing Policy; Capital and Ownership Structure ; O40 - Economic Growth and Aggregate Productivity. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005625769