Michelacci, Claudio; Suarez, Javier - In: Review of Economic Studies 71 (2004) 2, pp. 459-481
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, start-ups face larger costs of going public than mature firms. Sustaining a tight relationship with a monitor (bank,...
