Government Effectiveness as a Factor Explaining Listings in Developing Countries

Abstract

In this paper, we investigate the e↵ect government e↵ectiveness has on the number of listed firms worldwide from 2000 to 2016. We find that government e↵ectiveness has a positive and significant e↵ect on listings. A one-unit increase in government e↵ectiveness for developing countries leads to a 79 % growth in listed firms. For advanced countries, we also have a positive e↵ect, but it is not significant. One of our main explanations for these results is the increasing IPO volumes in developing countries.