In Canada, initial public offerings (IPOs) have decreased sharply over the past twenty years, inducing potentially substantial negative effects on the economy. The reasons for this decrease are controversial. To contribute to the debate, we analyze the Canadian IPO market over three decades (1986-2016). First we illustrate its specificities using IPOs on the main and the venture stock exchanges and using other junior markets a benchmark. We discuss the evolution of the IPOs, which differs considerably between natural resource and non-natural resource firms. We then provide empirical evidence based on 2,145 Canadian IPOs. On average, these IPOs generate three-year negative abnormal returns, and more than 70% report negative abnormal returns. Large issuers reporting profits constitute the only subsample that provides fair returns, but they account for less than 5% of IPOs. We observe a high level of skewness of abnormal returns, consistent with the behavioral finance proposition that investors are often unduly optimistic when valuing lottery stocks. The lemon market characteristics of the Canadian IPO market can probably explain why it is vanishing.

中文翻译：

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加拿大 IPO 市场的三个十年：演变、风险和回报

在加拿大，首次公开募股 (IPO) 在过去二十年中急剧下降，对经济产生潜在的重大负面影响。这种下降的原因是有争议的。为了对辩论做出贡献，我们分析了加拿大 IPO 市场的 30 年（1986-2016 年）。首先，我们使用主要和风险证券交易所的 IPO 并使用其他初级市场作为基准来说明其特殊性。我们讨论了 IPO 的演变，这在自然资源公司和非自然资源公司之间存在很大差异。然后，我们提供了基于 2,145 次加拿大 IPO 的经验证据。平均而言，这些 IPO 产生了三年的负异常回报，超过 70% 报告为负异常回报。报告利润的大型发行人构成了提供公平回报的唯一子样本，但它们占 IPO 的比例不到 5%。我们观察到异常回报的高度偏度，这与行为金融学主张一致，即投资者在评估彩票股票时往往过于乐观。加拿大IPO市场的柠檬市场特征或许可以解释为什么它正在消失。