Spin-offs to stock markets as a complementary form of entrepreneurship: Contrasting US, UK and Japanese experiences

Abstract

This study explores the impact of the national institutional environment on the listing of firms on stock exchanges in Japan, the US, and the UK. In particular, the study compares the incidence of: (1) independent firm initial public offerings (IPOs); and (2) the subsidiaries of established corporations being spun-off to stock markets. An empirical analysis is conducted on a sample of 9118 IPOs extracted from the Securities Data Company New Issue Database. The results show that Japan and the UK are more active in incubating new innovative ventures within large corporations and spinning them to the stock markets than their general entrepreneurial activity would suggest. These results direct our attention to different forms of industrial renewal in different institutional environments.

Keywords:

• entrepreneurship
• institutional theory
• corporate spin-off firms

Acknowledgements

The authors would like to thank two anonymous referees and Suma Athreye for her invaluable comments on the earlier version of this paper. The financial support of RIDE Centre at Chalmers University of Technology, the European Commission (Contract No. HPSE-CT-2002-00146) and the Paulo Foundation is gratefully acknowledged.

Notes

Notes

1. We split our sample to see whether our results would change depending on whether the data was collected before or after these reforms. We found no evidence to that effect.

2. This particular logistic regression equation was written to test whether Japanese entrepreneurial firms are more or less likely to be spin-offs as opposed to independent firm IPOs. Similar equations were written for the UK and US firms, see Table 6.