Abstract: The paper studies the effects of industrial boom cycle on IPO timing assuming, the industry has two states, prosperity and recession, which affect the firm's cash flow,and taking the IPO decision as the exercising of an American option. The main results show that the prosperity promotes, while the recession restrains IPO of the firm. Both the duration and extent of prosperity have negative relation with IPO triger value, while those of recession, antithetical. Our study will be helpfu to understand the mechanism of industrial boom cycle on firm going public.

Key words: industrial boom cycle, initial public offering, optimal timing, american option