The initial listing decisions of firms that go public

We analyze the initial listing decisions of IPOs that qualify for New York Stock Exchange listing. We find that IPOs are more likely to list on the exchange where their industry peers are listed Further, reverse LBOs and carveouts are more likely to choose the NYSE if the firm or their parent was previously NYSE-listed. Consistent with avoidance of delisting costs, we find that smaller, riskier firms tend to list on Nasdaq. Although direct issue costs are higher on the NYSE than on Nasdaq, total issue costs do not differ across exchanges and are unlikely to affect the listing decision.