2011/15 | LEM Working Paper Series | |
An Essay on the Emergence, Organization and Performance of Financial Markets: the case of the Alternative Investment Market |
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Valerie Revest, Sandro Sapio |
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Keywords | ||
Public equity, Market emergence, Market design, Alternative Investment Market, High-tech, Small firms.
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JEL Classifications | ||
G10, G18, M13, L26
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Abstract | ||
This work provides an overview of the historical evolution, the
organizational forms, and the performances of the stock exchanges and
market segments catering to small and growing companies, set up in
Europe in the last thirty years. Our analysis is mainly centered on
the Alternative Investment Market, created by the London Stock
Exchange in 1995. This case study yields useful insights about the
role of public and private interests in market emergence and in
shaping market architectures, the costs and benefits of light stock
market regulation, and the use of stock markets to support technology-
based small firms. A review of the existing empirical evidence shows
that dimensional growth of the AIM has been fueled by companies
characterized by low values of long-term returns, growth rates, R&D
productivity and solvency.
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