Session Details: Session 1083

IPOs: Causes and Consequences

Track K

Date: Tuesday, October 14, 2008

 

Time: 11:15 – 12:30

Paper

Room: Salon 19


Session Chair:
Roberto Ragozzino, University of Tennessee

Title: Are Firm Transformations Determined on a Punctuated or Continuous Timeframe?: Evidence from Entrepreneurial Firms

Authors

  • Asda Chintakananda, National Institute of Development Administration

Abstract: There have been conflicting perspectives on how and when do entrepreneurial firms undertake large strategic transformations. Are they determined across time with regards to strategic considerations? Or are they determined when sudden shocks occur as some entrepreneurship research suggest? This paper examines whether the decision to transform to become a public firm for the purpose of gaining a competitive advantage is made incrementally over time or based on a punctuated equilibrium approach. Integrating the perspectives of real options and punctuated equilibrium, hypotheses are developed in which firms will either accelerate or defer the timing of their firm transformation when clear market signals exist. However, when market signals are opaque, firms will act in accordance to what the punctuated equilibrium view would suggest.

Title: Examining Strategic and Institutional Effects on Foreign IPO Performance

Authors

  • Greg Bell, University of Dallas
  • Curtis Moore, West Virginia University
  • Igor Filatotchev, City University London

Abstract: We propose a comprehensive examination of three factors that influence foreign IPO performance, namely Country of Origin, Listing Market, and Corporate Governance. To date, no research has examined all three factors simultaneously. In order to examine the effects of all three factors, we integrate signaling and institutional theories to contribute to previous research. First, we examine multiple governance variables to develop a systematic understanding of the role of governance mechanisms in the performance of foreign firms. Second, we develop theoretical arguments and provide empirical evidence that home country effects significantly affect IPO firm performance. Finally, we demonstrate the salience of certain governance signals may depend upon the institutional context of the foreign market in which the foreign IPO is filed.

Title: Geographic Distance and M&A Markets: IPOs as Information Diffusion Mechanisms

Authors

  • Roberto Ragozzino, University of Tennessee
  • Jeffrey Reuer, University of Colorado, Boulder

Abstract: This paper examines acquisitions of small firms after they undergo an initial public offering (IPO). Using insights from information economics and recent work that have studied geographic distance as a source of adverse selection in other markets, we test whether the signals sent on the issuer affect the geographic proximity of the acquirer that purchases the firm. We develop the argument that specific features of issuing firms and the IPO process - venture capitalist backing, investment bank reputation, and underpricing - can provide signals that mitigate the effects of information asymmetry. The findings illustrate the relevance of several remedies to the risk of adverse selection in M&A deals and highlight the interdependencies between IPO and M&A markets.

Title: The Geography of Post-IPO Profits

Authors

  • Lawrence Plummer, University of Western Ontario
  • Elaine Mosakowski, Purdue University

Abstract: Agglomeration is purported to yield performance and competitive advantages, especially for new firms. Because of agglomeration externalities, it follows that the performance of one firm mirrors the performance of its neighbors by virtue of the co-location. This paper tests this conjecture by addressing these questions: First, are the profits of an entrepreneurial firm most strongly associated with the profits of its nearest neighbors Second, are the effects of agglomeration externalities symmetric among co-located firms In other words, do profits exhibit signs that agglomeration externalities, like the proverbial tide, lift all boats Finally, are the effects of externalities transmitted among neighboring firms instantaneously These questions are explored using data on the post-IPO profits of 324 firms that went public between 1990 and 1993.

All Sessions in Track K...

Sun: 10:00 – 11:30
Session 1507: Strategic Entrepreneurship Journal and its Relation to Entrepreneurship and Strategy
Sun: 13:00 – 14:30
Session 1607: University Entrepreneurship
Mon: 11:15 – 12:30
Session 1080: Ready, Set, GO! Launch Strategy and Performance
Session 1082: Corporate Venture Capital
Mon: 15:30 – 16:45
Session 1085: Small Firm Strategy
Mon: 17:00 – 18:15
Session 1079: Entrepreneurship in Context: International and Institutional Influences
Tue: 11:15 – 12:30
Session 1078: Entrepreneurial Orientation
Session 1083: IPOs: Causes and Consequences
Tue: 14:30 – 15:45
Session 1094: Learning and Performace in New Ventures
Wed: 10:00 – 11:15
Session 1087: Networks and New Ventures
Session 1097: Raising Capital - Risky Business!
Wed: 11:30 – 12:45
Session 1081: Venture Capital Investment: Worth the price?
Session 1099: Entrepreneurship Theory: Emerging Views


Strategic Management Society

Cologne Conference