The Timing of Voluntary Delisting

Alcino Azevedo; Gonul Colak; Izidin El Kalak; Radu Tunaru

doi:10.1016/j.jfineco.2024.103832

The Timing of Voluntary Delisting

Alcino Azevedo, Gonul Colak^*, Izidin El Kalak, Radu Tunaru

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

For many firms, voluntarily delisting from a stock exchange can be optimal. We model an entrepreneur's incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm's performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.

Original language	English
Article number	103832
Number of pages	21
Journal	Journal of Financial Economics
Volume	155
Early online date	3 Apr 2024
DOIs	https://doi.org/10.1016/j.jfineco.2024.103832
Publication status	E-pub ahead of print - 3 Apr 2024

Bibliographical note

Keywords

Competing risk
Political uncertainty
Regulatory uncertainty
Voluntary delisting

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10.1016/j.jfineco.2024.103832Licence: CC BY 4.0

A Azevedo et al_The timing of voluntary delisting
Copyright © 2024 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/).
Final published version, 1.51 MBLicence: CC BY 4.0

Cite this

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title = "The Timing of Voluntary Delisting",

abstract = "For many firms, voluntarily delisting from a stock exchange can be optimal. We model an entrepreneur's incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm's performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.",

keywords = "Competing risk, Political uncertainty, Regulatory uncertainty, Voluntary delisting",

author = "Alcino Azevedo and Gonul Colak and {El Kalak}, Izidin and Radu Tunaru",

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T1 - The Timing of Voluntary Delisting

AU - Azevedo, Alcino

AU - Colak, Gonul

AU - El Kalak, Izidin

AU - Tunaru, Radu

PY - 2024/4/3

Y1 - 2024/4/3

N2 - For many firms, voluntarily delisting from a stock exchange can be optimal. We model an entrepreneur's incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm's performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.

AB - For many firms, voluntarily delisting from a stock exchange can be optimal. We model an entrepreneur's incentives to voluntarily delist the firm as a trade-off between consumption of private benefits when listed and expected improvements in the firm's performance after delisting. Our model allows for heterogeneity across firms and countries, and various micro and macro shocks affect the delisting decision. Such a model makes novel predictions regarding the delisting patterns around the world. We empirically confirm these predictions using manually collected delisting data from 26 countries. Increasing policy and regulatory uncertainties can partially explain the greater popularity of voluntary delistings.

KW - Competing risk

KW - Political uncertainty

KW - Regulatory uncertainty

KW - Voluntary delisting

UR - https://www.sciencedirect.com/science/article/pii/S0304405X24000552

UR - http://www.scopus.com/inward/record.url?scp=85188960207&partnerID=8YFLogxK

U2 - 10.1016/j.jfineco.2024.103832

DO - 10.1016/j.jfineco.2024.103832

M3 - Article

VL - 155

JO - Journal of Financial Economics

JF - Journal of Financial Economics

M1 - 103832

ER -

The Timing of Voluntary Delisting

Abstract

Bibliographical note

Keywords

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