The drivers of IPO activity in the sustainability era: insights from G8 countries

Purpose This study aims to examine how energy transition, sustainable development, total natural resources, environmental innovation and trade influence initial public offering (IPO) activity across G8 countries from 1990 to 2023. The study also examines how the effectiveness of environmental policy moderates these relationships. Design/methodology/approach Using panel estimations, we employ feasible generalised least squares (FGLS) as the primary estimator, supported by fixed- and random-effects for baseline comparison and the augmented mean group for robustness. Findings The macroeconomic variables of energy transition, environmental innovation, environmental regulation and trade are found to have a significant effect on IPO activity across G8 countries. These results indicate the importance of sustainability-driven factors in shaping IPO behaviour. Moreover, environmental regulation strengthens these positive relationships by enhancing legitimacy and boosting investor confidence. All results remain robust under augmented mean group robustness checks. Originality/value The study examines how macroeconomic forces shape IPO activity in G8 countries.