Political Uncertainty and IPO Activity: Evidence from U.S. Gubernatorial Elections

Gonul Colak, Artem Durnev, Yiming Qian

Research output: Contribution to journalArticleScientificpeer-review

257 Citations (Scopus)


We analyze IPO activity under political uncertainty surrounding gubernatorial elections in the U.S. There are fewer IPOs originating from a state when it is scheduled to have an election. To establish identification, we develop a neighboring-states method that uses bordering states without elections as a control group. The dampening effect of elections on IPO activity is stronger for firms with more concentrated businesses in their home states, firms that are more dependent on government contracts (particularly state contracts), and harder-to-value firms. This dampening effect is related to lower IPO offer prices (hence higher costs of capital) during election years.
Original languageEnglish
Peer-reviewed scientific journalJournal of Financial and Quantitative Analysis
Issue number6
Pages (from-to) 2523-2564
Number of pages42
Publication statusPublished - 04.12.2017
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • political uncertainty
  • initial public offerings
  • gubernatorial elections
  • IPO pricing
  • 517 Political science


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