The paper reviews firms' motives for seeking publicly traded rather than privately held finance. Factors that play a role are the need to provide a liquid market if the shares are to be widely held (for example, by employees as an incentive device); the benefits of having a stock market price that conveys information about the firm's prospects,, not just to potential financiers but also to customers, employees, suppliers, etc.; and the advantages of enhanced competition among providers of finance.
International differences in the use of listed equity are displayed in a summary table. A number of possible reasons for these differences are discussed: institutional inventors' appetite for small-company shares, the adequacy of the services provided by the stock exchanges and by financial intermediaries in general, these legal safeguard offered to minority shareholder, arrangements for corporate governance, and taxations.
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