Energy Technology IPO's: Linking Financial Markets and Sustainable Development
|William Moore and Rolf Wuestenhagen, University of St. Gallen, Switzerland|
|This paper will present the preliminary results of research being conducted to understand the link between financial markets and sustainable development by exploring the process by which young sustainable energy technology companies (“sustainability pioneers”) are taken public through initial public offerings (IPO’s) at major stock markets around the world. |
The primary purpose of the research, generally, is to understand the link between financial markets and sustainable development by looking, specifically, at why energy technology companies are taken public, determining whether those that have been taken public have been successful and describing the characteristics of these IPO’s relative to IPO’s generally. Approximately 75 IPO’s of young energy technology companies have taken place over the last 5 years, a small number relative to the thousands that have taken place in total. The technical process by which these young companies are taken public is defined by law and stock market regulations. Capital market receptivity, investment banking practices, auditor opinions, investor characteristics and other factors also significantly influences the process. The study is investigating these factors.
The IPO is an important event for sustainable energy technology companies. The IPO allows early-stage investors such as venture capitalists to exit their investments, provides growth capital, extends the universe of sustainable investments for sustainability investment funds and may play a role in attracting larger corporations to the issue of sustainable energy. Additionally, research has shown that a healthy IPO market is prerequisite to drawing capital to early-stage companies and promoting innovation in any industry and that the absence of capital flowing to these companies may inhibit the innovation process and movement toward a more efficient and sustainable energy future. The study is investigating these relationships.
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3:30 PM-5:00 PM, Tuesday, 9 November 2004, OT