Dunkin Donuts caught a lot of attention last week with the company's initial public offering, and MarketWatch reports that we are in the midst of the busiest round of IPOs in the US since the start of the recession.  The long term trend, however, shows that IPO activity among US businesses has been in decline relative to other markets.  Take a look at this chart:

That is from a paper by Craig Doidge, G Andrew Karolyi, and René M Stulz.  In a recent post at VOX, Doidge, Karolyi, and Stulz summarize their work analyzing IPOs from around the world since 1990.  They argue that as financial markets became more globalised in the 2000s, IPO activity shifted, and the US dominance waned:

Our analysis shows that countries with better institutions have more domestic IPO activity, measured as either the annual number of domestic IPOs scaled by the lagged number of domestic listed firms or as the annual proceeds raised in domestic IPOs scaled by lagged GDP. The results are both statistically and economically significant, even after controlling for local growth opportunities, worldwide domestic IPO activity, and financial and economic development. We expect the effect of globalisation to be more powerful in the second half of our sample period. When we compare the impact of institutions on IPO activity in the 1990s and the 2000s, we find that the institutions of the country in which a firm is located are much less important for explaining domestic IPO activity in the 2000s compared to the 1990s.

Much of the growth in IPO activity around the world is through global IPOs. With globalisation, firms can use global markets to go public to avoid being constrained by their home country. We use a measure of global IPO activity that evaluates how intensively the firms in a country pursue global opportunities. We find that firms from countries with weaker institutions have more global IPO activity, after controlling for the overall level of domestic IPO activity, local and global growth opportunities, worldwide domestic and global IPO activity, and financial and economic development. We also find some evidence that the negative relationship between global IPO activity and countries’ institutions is stronger in the 1990s compared to the 2000s.

Read The US left behind: The rise of IPO activity around the world here.