scholarly journals The Impact of Governmental Intervention on the Association Between Initial Public Offering and Future Stock Issuance

2020 ◽  
Vol 31 (4) ◽  
pp. 665-687
Author(s):  
Dimitrios Gounopoulos ◽  
Yilmaz Guney ◽  
Jingsi Leng ◽  
Victoria Patsika
Keyword(s):  
Initial Public Offering ◽  
Governmental Intervention ◽  
Public Offering ◽  
The Impact ◽  
Stock Issuance

scholarly journals Corporate governance and IPO underpricing: evidence from the italian market

2021 ◽  
Author(s):  
Emanuele Teti ◽  
Ilaria Montefusco
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Boards Of Directors ◽  
Stock Option ◽  
Board Members ◽  
Ipo Underpricing ◽  
Italian Market ◽  
Public Offering ◽  
The Impact ◽  
Positive Effect

AbstractThis paper aims to analyse the impact of firms’ corporate governance characteristics on the degree of first-day returns (i.e., underpricing) in the Italian initial public offering (IPO) market. In particular, this work investigates the impacts of the characteristics of boards of directors (BoDs) and ownership structure on the underpricing of newly offered shares. By studying a sample of 128 Italian IPOs between 2000 and 2016, it is concluded that corporate governance characteristics affect the degree of first-day returns following a company’s IPO. More specifically, the size of the BoD negatively affects underpricing, while the ownership of institutional investors and board members has a positive effect on the degree of underpricing. Conversely, no significant evidence is found with regard to board independence, the number of female directors in the boardroom, the implementation of stock option plans and ownership concentration.

Friends in high places : two essays on the importance of corporate political connections

2015 ◽  
Author(s):  
◽  
Reza Houston
Keyword(s):  
Initial Public Offering ◽  
Political Connections ◽  
Target Firm ◽  
University Of Missouri ◽  
Accounting Performance ◽  
The Public ◽  
Public Offering ◽  
The University ◽  
The Impact ◽  
The Relationship

[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT AUTHOR'S REQUEST.] This study is an examination of the relationship between political connections and the undertaking of major firm events. In our first essay, presented in Chapter 3, we examine the impact politically connected appointments have on firm acquisition behavior. Using proxy statements, we create a unique database of politically connected bidders and merger targets. We find that bidders who hire connected individuals to the board or management team are more likely to avoid merger litigation. Connected bidders make more bids after the appointment. These firms also bid on larger targets. We determine there is a positive relation between the control premium and the relative of the target's connections. Connected acquirers have superior post-merger accounting performance, particularly when they acquire a connected target firm. In the second essay, presented in Chapter 4, we examine the relationship between political connections of private firms and the initial public offering process. Using registration statement information, we create a unique database of politically connected IPO firms. We find that political connections are substitutes to high-quality underwriters and big four auditors. Politically connected firms manage earnings more highly upward than non-connected firms prior to the public offering. Politically connected firms also exhibit less underpricing than non-connected firms. Politically connected IPO firms also have superior post-IPO returns relative to non-connected IPO firms.

scholarly journals Does Leverage Constrain Real and AEM Around IPO Corporate Event? Evidence from the Emerging Market

2019 ◽  
Vol 20 (2) ◽  
pp. 354-367
Author(s):  
Sani Hussaini Kalgo ◽  
Bany-Ariffin A.N. ◽  
Hairul Suhaimi Bin Nahar ◽  
Bolaji Tunde Matemilola
Keyword(s):  
Earnings Management ◽  
Initial Public Offering ◽  
Emerging Market ◽  
Order Theory ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Cross Sectional ◽  
Pecking Order Theory ◽  
Public Offering ◽  
The Impact

The article investigates whether Malaysian initial public offering (IPO) firms engage in real and accrual earnings management (AEM) and examines the impact of leverage on the earnings management’s discretionary behaviour of the firms for the period of 2003–2013. The Dechow, Sloan, and Sweeney (1995, The Accounting Review, 70[2], 193–225) cross-sectional modified Jones model was used to estimate discretionary accruals, while Roychowdhury’s (2006, Journal of Accounting and Economics, 42[3]), 335–370) cross-sectional models were used to investigate abnormal real activity discretionary behaviour. The results indicate Malaysian IPO firms engage in real and accrual discretionary behaviour. The graphical presentations of the earnings’ management proxies indicate higher real and AEM for high-leverage firms. Similarly, the multivariate analysis indicates a positive relationship between leverage and earnings management, which is in tandem with the agency cost of free cash flow theory and debt hypothesis. It is also consistent with the pecking-order theory of capital structure. This study suggests that regulatory agencies and standard setters should continue to improve quality of accounting reports in order to protect investors’ invested capital.

scholarly journals The Impact of R&D Alliance on the Survival of Newly Listed High Tech Firms

2016 ◽  
Vol 6 (2) ◽  
pp. 197
Author(s):  
Vicar S. Valencia
Keyword(s):  
United States ◽  
Longitudinal Data ◽  
Financial Performance ◽  
Initial Public Offering ◽  
The United States ◽  
High Tech ◽  
Estimation Strategy ◽  
Public Offering ◽  
The Impact

This paper investigates the extent to which R&D alliance participation affects the survival performance of newly listed high tech firms. The estimation strategy identifies the impact through changes on a firm’s alliance status. Using longitudinal data on high tech firms that had an initial public offering in the United States, results suggest that R&D collaborating firms experience greater survival, relative to non-R&D collaborating firms. In particular, participation in an R&D alliance is associated with an attenuation of delistment due to poor financial performance.

ASIAN AMERICAN-FOUNDED VENTURES IN SILICON VALLEY: CHALLENGES, STRATEGIC PARTNERSHIP, AND PERFORMANCE

2010 ◽  
Vol 18 (04) ◽  
pp. 355-375
Author(s):  
DAVID Y. CHOI ◽  
DONG CHEN ◽  
WOO JIN LEE
Keyword(s):  
Initial Public Offering ◽  
Asian American ◽  
Silicon Valley ◽  
Share Price ◽  
Strategic Partnership ◽  
Strategic Partnerships ◽  
Ipo Performance ◽  
And Performance ◽  
Public Offering ◽  
The Impact

This paper examines the performance of Silicon Valley ventures with Asian-American founding teams. We review some challenges faced by these ventures, compare their performance with that of other ventures, and analyze the impact of strategic partnerships on their performance. Our results indicate that firms founded by Asian American entrepreneurs tend to require more time to reach initial public offering (IPO) status than do other ventures in Silicon Valley. Our results further show that, despite needing this extra time, Asian American-founded ventures significantly outperformed their counterparts in 12-month post-IPO share price gain. This superior short-term post-IPO performance suggests that Asian American firms, particularly those that lacked relationships with U.S.-based strategic investors, might have been undervalued prior to and at IPO.

Assessing the Impact of Customer Concentration on Initial Public Offering and Balance Sheet–Based Outcomes

2017 ◽  
Vol 81 (6) ◽  
pp. 42-61 ◽  
Author(s):  
Alok R. Saboo ◽  
V. Kumar ◽  
Ankit Anand
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Balance Sheet ◽  
Performance Outcomes ◽  
Customer Relationships ◽  
Negative Effects ◽  
Public Offerings ◽  
Prior Literature ◽  
Public Offering ◽  
The Impact

Using the notion of customer concentration, the authors argue that firms should evenly spread their revenues across their customers, rather than focusing on a few major customer relationships. Prior literature suggests that major customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm's bargaining power relative to its customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in customer concentration reduces profitability by 3.35% (or about $7 million) in the subsequent year, or 9.4% cumulatively over the next four years (or about $20.32 million). Further, the authors find that the negative effects of customer concentration decrease with increase in organizational (marketing, technological, and operational) capabilities and increase with low customer credit quality.

scholarly journals ANALISIS FAKTOR – FAKTOR YANG MEMPENGARUHI INITIAL RETURN SETELAH IPO DI BURSA EFEK INDONESIA PERIODE 2017-2019

2021 ◽  
Vol 6 (1) ◽  
pp. 77-90
Author(s):  
Debi Carolina ◽  
Dwi Desy Miswati
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Financial Leverage ◽  
Factors Affecting ◽  
Financial Firms ◽  
Initial Return ◽  
Public Offering ◽  
The Impact ◽  
A Company

Initial Public Offering is a mechanism in which a company for first time issues new stock and is then offered to the public. The factors affecting the initials return are Return On Asset, Financial Leverage, and Earning Per Share. The problems with this research are (1) What is the development of return on asset, financial leverage, earning per share and initial return on non-financial firms registered in BEI? (2) How does return on asset, financial leverage, and earning per share affect the initials return partially? (3) How does return on asset, financial leverage, and earning per share affect the initials return simultaneously? The purposes of this research are (1) To find out the progression of return on asset, financial leverage, earning per share, and initial return. (2) To know the impact of return on asset, financial leverage, and earning per share toward the initial return partially. (3) To know the impact of return on asset, financial leverage, and earning per share toward the initial return simultaneously. Locus in this research is conducted on a company that did IPO and registered to the Indonesian Stock Exchange in 2017-2019. The number of peoples in this research are 145 companies, and the selection of samples was used by purposive sampling technique to 34 IPO companies listed in the Indonesian Stock Exchange as a research. The method of data analysis used is descriptive and verificative, where it makes classical assumptions and multiple linear regression tests. Simultaneous research reveals that there have been significant effects on initials return. And partial, financial leverage has a positive effect on the initials return. Whereas the return on asset and earning per share have no effect on initials return.

Determinants of the exit value in European venture capital-backed technology startups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benedetta Montanaro ◽  
Angelo Cavallo ◽  
Giancarlo Giudici ◽  
Antonio Ghezzi
Keyword(s):  
Human Capital ◽  
Venture Capital ◽  
Initial Public Offering ◽  
New Ventures ◽  
Content Type ◽  
Investor Heterogeneity ◽  
Public Offering ◽  
The Impact ◽  
The Empirical Analysis ◽  
Technology Startups

Purpose This study aims to analyze the impact of different exit alternatives, investor presence and founders’ human capital on the exit value of European venture capital (VC)-backed high technology startups. Design/methodology/approach The empirical analysis is based on a sample of 107 European firms that obtained an exit through Merger&Acquisition (M&A) or an initial public offering (IPO) between 2010 and 2017, backed by VC investors. Findings This study provides empirical evidence on how different exit alternatives, investor heterogeneity and founders’ human capital may affect the exit value of European VC-backed startups. Exiting through an IPO and retaining a larger equity stake are positively correlated with the exit value. The presence of business angels and non-governmental VC firms is associated with larger valuations. Founders’ previous education was positively correlated with the exit value. Originality/value Exit strategies in technology startups are essential to capitalize investors’ efforts and reinvest cash into new ventures, supporting the development of entrepreneurial ecosystems and countries’ competitiveness. The results of this study provide interesting hints for policymakers and contribute to an in-depth understanding of the drivers of exit valuation for startups.

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