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Facebook’s initial public offering last week has sparked a new conversation about IPOs. But what really does it mean when a company offers shares to the public, and why should we care?

A new study from the Kauffman Foundation tries to answer that question, analyzing the revenues and jobs created by companies before and after they went public. Here’s what the researchers found:

From June 1996 to 2010, a total of 2,766 companies completed IPOs in the U.S. Those companies employed five million people prior to the public offerings, and 7.3 million people in 2010.

Now, here’s the rub.

From 1980 to 2000, the country was producing roughly 298 new IPOs per year. But from the 2001 to 2011, the average had dropped to just 90 per year.

That slow down in the number of IPOs has had an impact on job creation. According to the study, had the number of IPOs kept pace during the past decade, those companies could have produced another 1.8 million jobs. (A 2009 study estimated that 22 million jobs were lost because of the “broken” IPO market.)

As folks like to say, hindsight is 20-20. But the report also produces some other interesting factoids.

–California is home to 33 percent of the IPOs, but Massachusetts led the nation with 22 IPOs per one million residents. That was better than any other state. California and Washington D.C. had 16 IPOs per one million residents, while Washington, Colorado, Connecticut, Maryland and Minnesota produced between seven and nine IPOs per million residents.

–Companies that went public in 2001 had a far better chance of survival than those who conducted IPOs in previous years, which includes the dot-com bust. Fifty three percent of companies that went public in 2001 were still around at the end of 2010. That compared to just 29 percent of companies that went public in 2000.

Interestingly, the report also digs into what it calls “Schumpterian Innovation,” the idea that  certain companies can revolutionize entire economic sectors in part through “creative destruction.” To illustrate the point, the researchers looked at three companies that conducted IPOs: Amazon (1997 IPO); eBay (1998 IPO); and Google (2004 IPO).

Here’s the full report:

Post-IPO Emplyment Revenue Growth_report_FINAL (1)

[IPO photo via BigStock]

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