Capital structure and ipo market timing in the U.S. high-tech industry

Abstract

The scope of this master thesis is to understand what drives the decision by American firms to raise capital through initial public offerings. In particular we assess whether American technology firms try to time the IPO market when they decide to raise capital by testing the market timing theory of capital structure. Our findings do not provide significant evidence to support the theory, however tech firms show a stronger tendency to attempt to time markets compared to the overall sample. We conclude that market timing, as defined by Alti (2006), is not the only motivation driving financing decisions of high-tech companies.