The Long and the Short of It: Do Public and Private Firms Invest Differently?

Elena Patel, Naomi Feldman, Laura Kawano, Nirupama Rao, Michael Stevens and Jesse Edgerton, 2018.
Using data from U.S. corporate tax returns, the authors find robust evidence that public firms invest more than private firms overall, particularly in research and development, and that firms dedicate more of their investment to research and development following an IPO. The authors also find that firms reduce these investments upon going private. [download pdf]