A study of long-term stock performance and firm age-at-IPO in the Nordic countries

Abstract

We study 117 IPOs in the Nordic countries from 2000 to 2015, investigating whether there is an age-effect on firm performance, and the relationship between long-term stock performance and firm age-at-IPO. We define long-term stock performance as the firm’s five-year CAPM abnormal return relative to a portfolio of peers. We find that there is a negative relationship between sales growth and aging. Moreover, cash flow volatility and net profit margin seems to be somewhat related to firm age-at-IPO. However, the results are not statistically significant at a sufficient level. We also find no statistically significant relationship between abnormal return and firm age at-IPO. Thus, we conclude that there is no evidence of a relationship between long-term stock performance and firm age-at-IPO in the Nordic countries in our sample.