Why firms do not go public: The evidence from Poland

This paper examines factors influencing the decision not to go public by enterprises under the conditions in force on the Polish capital market. In the study we asked CFOs Polish enterprises divided into two groups to formulate their insights in the area of IPO decision making. The first group consisted of the entities that have previously conducted an IPO, the second one included the entities that have not executed an IPO (but considered doing so in the past or were candidates for doing it in the future). The survey results can be summarised as follows. First, the deliberation to undertake an IPO is very sensitive to the question of time, costs and reporting duties in companies with successful IPO status. The next factor - to avoid IPO failure - is more exogenous in its nature indicating that insiders could be concerned also with industry conditions that can affect the success or failure of the IPO process. Surprisingly, the limitation of company control, ensuring corporate transparency and limitation or loss of company control play no key role in considerations about IPO disadvantages. Second, the not tried companies place a big emphasis on decision-making control. CFOs from this group of companies also possess a very strong feeling regarding the fear of IPO failure. Similar to successful companies, the respondents concern very strongly with market and industry conditions affecting the success of going public.