Using a dataset that enables the identification of the supply chain of small-and medium-sized enterprises (SMEs) in Japan, this paper examines the impact of business partners' initial public offerings (IPOs) on the growth of investment activity. Empirical evidence suggests that IPOs of business...

We test whether there are liquidity-related spillovers of IPOs on supply-chain partners (the IPO spillover hypothesis). We find that private suppliers and customers of IPO firms achieve higher growth rates of revenue, cash, and PP&E than do comparison or matched firms. The transmission mechanism...