This paper investigates the link between intended use of proceeds and the decline in post-issue operating performance of IPO firms. It distinguishes between capital and strategic motives and employs quantile regressions to examine the Indonesian equity market over the period of 2000-2010. The overall evidence shows that post-issue performance can be explained by firm motivation to IPO issue with the capital motive being the critical driver of good performance in Indonesia. Investment in fixed assets and in stock market shares lead to better performance while other usages lead to poor performance. The results are robust to accounting for ownership structure and to alternative classifications of IPO intent. These results have policy implications for the management of IPO proceeds.

The disappointing economic performance of Sub-Saharan African (SSA) economies in the late 1980s prompted reforms in foreign trade and Foreign Direct Investment (FDI) in the early 1990s. Using the Autoregressive Distributed Lag (ARDL) approach and Pedroni panel estimation procedures that allow for heterogeneity, this study found that exports and FDI have a significant impact on economic growth. Granger-type causality tests show the interrelatedness of exports, FDI, imports and income variables. The results also provide evidence of a two-stage causal chain of exports, imports and income. This article calls for more market-oriented policy reforms in SSA countries.

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Heterogeneous panel causality tests are employed to consider the relationship between urbanization change and economic growth (i.e., differenced logged GDP per capita). Incomeand geography-based panels demonstrated substantial variation in that relationship. Urbanization caused economic growth in high income countries, but non-causality could not be rejected for both middle-income and Latin American countries. A bi-directional, equilibrium relationship was uncovered for low-income, predominately African countries where economic growth had a positive, causal effect on urbanization, but where urbanization, in turn, had a negative, causal effect on economic growth. Hence, urbanization and economic growth either co-evolve, as they do for low income/African countries and (likely) for high income countries, or else the two processes are somewhat decoupled, as they are for middle income and Latin American countries, despite their high degree of correlation.

This article examines the role played by primary and secondary equity markets in economic growth. It departs from standard literature to integrate both markets and to explicitly acknowledge the primary equity market. By employing a variety of dynamic panel estimators for 54 countries over the period 1995‐2010, we show that the primary equity market is not an important determinant of economic growth, although it facilitates the development of the secondary market. This study also confirms the importance of liquidity provided by the secondary market. The evidence here calls for further investigation into the capital‐raising function of equity markets.