We find that IPOs issued in more competitive, and more highly leveraged, industries underperform in the three years following their issuance. Both results are economically large, and are robust to numerous controls. We conduct several tests to trace the economic sources of this underperformance....

We find evidence that the underperformance of some IPOs, and firms in concentrated industries, have common empirical roots. The most likely explanation for both is a confluence of two well known rational theories, which predict that: (1) entrepreneurs in concentrated industries optimally time...