6 The size effect of firms going public
on the Spanish capital market
Susana Álvarez-Otero and Víctor M. González-Méndez
Abstract
The aim of this chapter is to analyze whether, for the Spanish market, the return of the
companies that go public differs according to their size. To do this, we analyze not only
the initial and long-term stock returns, but also the performance of the companies. The
database for the study comprises all the firms that went public on the Madrid Stock
Exchange between 1985 and 1997. Our analysis shows the existence of a size effect on
the initial return offered by these companies and on the financial performance of the
firms. Larger firms show a greater initial return to investors. Our results also provide
evidence that the deterioration ...