Going Public and Stepping Up: Do companies become more productive after listing on the stock exchange?

Abstract: This thesis examines whether Swedish companies become more productive, i.e., achieve higher total factor productivity (TFP), after going public. Additionally, it extends previous findings about stock price informativeness to a Swedish context and tests whether it has any ex ante going public implications on productivity. A panel dataset is constructed with financials for Swedish companies listed on Nasdaq Stockholm at any point between 1997-2018, including years when public and private. Using the Ackerberg method, TFP is predicted and stock price informativeness is estimated as stock price non-synchronicity (PSI). The results are that going public has no significant effect on TFP, but that firms experience a drop in the IPO-year and a subsequent rebound two years after. Furthermore, PSI is a leading indicator on TFP for public firms, but it has no ex ante explanatory value on which companies benefit from going public. Lastly, PSI and financial distress alleviate, while the amount of capital injected and the trend in TFP prior to IPO exacerbate the IPO-year drop in TFP.