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Three essays on the role of the stock market in financing small capitalization

Thesis

French

ID: <10670/1.gbi7fc>

Abstract

SMEs form the majority of the French economy and have a major role in employment and value creation in the country. In a context of difficulties in financing their development, the question of alternative methods of financing that should be favored in order to support them is of great interest. The stock exchange is an alternative source of financing, supported by the public authorities, to enable small and mid-cap companies to benefit from the advantages of an IPO, which affect the growth as well as the image, reputation and relations of the company. This research is based on three questions for which three essays answer using different methodologies: What contribution does listing make to the operational performance and growth of SMEs and ISEs? ; What are the factors of success for SMEs and ISEs on the stock exchange? ; What are the effects of the SSP-SME on eligible SME? Results show that the growth of SMEs and ETIs develops after the IPO at a slower rate than before the operation, and their operational performance deteriorates. SMEs and ISEs prepare for the IPO by getting listed at the time of their top performance. Results also show that the characteristics of SMEs and ISEs at the time of the IPO and those of their securities after the IPO have a significant effect on their success on the Stock Exchange. To develop SMEs and ISEs financing by the Stock Exchange, the SSP-SME is a saving program launched to orient public savings towards the financing needs of eligible SMEs and ISEs. The event study conducted shows that the SSP-SME succeeded to attract investors’ attention by creating abnormal profitability and volumes around the announcement date, however, some companies benefited more from the advantages of this program than others. Whether it is a question of succeeding on the Stock Exchange or benefiting from the advantages of public measures undertaken within the SSP-PME, the results show that SMEs and ISEs do not form a homogeneous group, and certain variables, such as the shareholding structure after the IPO and the size of the company, significantly influence the experience of SMEs and ISEs on the Stock Exchange. These determining variables deserve to be taken into account in the design of the Small and Medium Cap Exchange and in the incentive mechanisms used to promote this financing option, to ensure that the Stock Exchange is adapted to the specific needs of SMEs and ISEs.

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