Why do companies go public: Empirical analysis of Russian and Austrian companies

Abstract

The objective of the Master Thesis is to define the relationship between a set of financial factors and decision to go public by Russian and Austrian companies in order to develop recommendations that will enable investors to make better analysis of listing companies and decisions concerning their portfolio structure. The study showed that there is no significant influence of financial factors on decision to go public in Russia. For Austrian market there is a strong significant influence of two financial factors – leverage and return on assets – when deciding to go public. It shows that financial position of a company in Russia is not a predictor that explains why companies decide to become public and it is confirmed by the overall underdevelopment of the IPO market and volatility in IPO decisions due to corporate governance system and state prevalence in decision making. In Austria public equity decision can be explained by company’s current state and its financial position. The contribution of this research is that it studies those countries where this kind of research was not done before and also it reveals importance of fundamentals as ex ante factors in the IPO model. There is a set of recommendations tailored for investors about Russian and Austrian IPO market.