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Investigation into the motivations behind the listing decisions of UK companies

Commissioned by the Department for Innovation and Skills

The main purpose of this research was to explore the drivers behind the motivations for UK company listing decisions, and related corporate governance issues. Findings from the recent Kay Review (2012) into the operation of UK stock exchanges raised concerns over market volatility and investor short termism, suggesting a need for changes that might make the markets more attractive for both investors and new entry businesses. The UK Coalition Government is concerned with facilitating business growth and understands that Mid-Size Businesses (MSBs), defined as businesses with current sales turnover of between £25m and £500m, are potentially an important driver of growth in the UK economy.

Focusing predominantly on UK owned and based Mid-sized businesses (MSBs), this research built upon the previous CEEDR/BIS MSB research (2010 and 2011), by undertaking an in-depth qualitative examination of MSBs, whilst also including some smaller rapid growth businesses with the capability of soon becoming MSBs. The research considered the various attributes of these businesses i.e. size, sector, location, age and growth aspiration, with a specific focus on variations between companies that are: (i) long term listed; (ii) recently listed; (iii) recently de-listed; and (iv) long term unlisted public and private companies.

A key finding of this research was that whilst longer established UK listed companies were satisfied that these markets were operating favourably for them, there were concerns raised amongst younger potential listing companies about the market volatility and viability, suggesting that the government could do more to develop market stability and longer investment horizons.

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