How do foreign initial public offerings attract investor attention? A study of the impact of language

2018 ◽  
Vol 17 (3) ◽  
pp. 363-384
Author(s):  
Dane P Blevins ◽  
Amy Ingram ◽  
Eric WK Tsang ◽  
Mike W Peng
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
New Ventures ◽  
The United States ◽  
Pivotal Role ◽  
Investor Attention ◽  
Public Offerings ◽  
Power Of Words ◽  
The Impact ◽  
Strategic Outcomes

Language is increasingly recognized as having the ability to shape strategic outcomes. To understand language’s impact in entrepreneurial settings, we study language in the context of foreign initial public offerings, a setting where organizations may suffer from both the liabilities of newness and foreignness. Our sample consists of the population of foreign initial public offerings debuting in the United States between 2001 and 2014, which collectively raised over US$60 billion in capital. We find that both new ventures’ and the media’s language impact investors by influencing the level of interest in the foreign initial public offerings. We also reveal that the media’s use of analogies plays a pivotal role in familiarizing and legitimizing unfamiliar organizations. Overall, our study offers insights into the power of words in managing the challenges associated with the liabilities of newness and foreignness.

The Oxford Handbook of IPOs

2018 ◽  
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Financial Regulation ◽  
Large Body ◽  
Public Information ◽  
The United States ◽  
Minimum Size ◽  
Stock Exchanges ◽  
Public Offerings ◽  
Firm’S Life Cycle

Firms generally begin as privately owned entities. When they grow large enough, the decision to go public and its consequences are among the most crucial times in a firm’s life cycle. The first time a firm is a reporting issuer gives rise to tremendous responsibilities about disclosing public information and accountability to a wide array of retail shareholders and institutional investors. Initial public offerings (IPOs) offer tremendous opportunities to raise capital. The economic and legal landscape for IPOs has been rapidly evolving across countries. There have been fewer IPOs in the United States in the aftermath of the 2007–2009 financial crisis and associated regulatory reforms that began in 2002. In 1980–2000, an average of 310 firms went public every year, while in 2001–2014 an average of 110 firms went public every year. At the same time, there are so many firms that seek an IPO in China that there has been a massive waiting list of hundreds of firms in recent years. Some countries are promoting small junior stock exchanges to go public early, and even crowdfunding to avoid any prospectus disclosure. Financial regulation of analysts and investment banks has been evolving in ways that drastically impact the economics of going public—in some countries, such as the United States, drastically increasing the minimum size of a company before it can expect to go public. This Handbook not only systematically and comprehensively consolidates a large body of literature on IPOs, but provides a foundation for future debates and inquiry.

scholarly journals Where Have All the IPOs Gone?

2013 ◽  
Vol 48 (6) ◽  
pp. 1663-1692 ◽  
Author(s):  
Xiaohui Gao ◽  
Jay R. Ritter ◽  
Zhongyan Zhu
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Small Firms ◽  
Alternative Explanation ◽  
The United States ◽  
Economies Of Scope ◽  
Analyst Coverage ◽  
Public Offerings ◽  
Sarbanes Oxley ◽  
Independent Firm

AbstractDuring 1980–2000, an average of 310 companies per year went public in the United States. Since 2000, the average has been only 99 initial public offerings (IPOs) per year, with the drop especially precipitous among small firms. Many have blamed the Sarbanes-Oxley Act of 2002 and the 2003 Global Settlement’s effects on analyst coverage for the decline in IPO activity. We find very little support for the conventional wisdom, and we offer an alternative explanation. Our economies of scope hypothesis posits that the advantages of selling out to a larger organization, which can speed a product to market and realize economies of scope, have increased relative to the benefits of operating as an independent firm.

scholarly journals Manufacturing Startups

2013 ◽  
Vol 135 (11) ◽  
pp. 36-41
Author(s):  
Elisabeth B. Reynolds ◽  
Hiram Samel
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Scale Up ◽  
The United States ◽  
Market Demand ◽  
Public Offerings ◽  
Us Economy ◽  
Research Investment ◽  
The Us ◽  
Stage Development

This article analyses the reasons and impact of shift of manufacturing startups from the United States to overseas. After years of refining prototypes and perfecting pilot plants, advanced manufacturing startups frequently look overseas when it is time to scale-up for commercial production. Both manufacturing and technology companies go abroad looking for partnerships, because it is easier for investors. When startups scale their manufacturing elsewhere, the United States loses more than a possible return on the research investment that made such breakthroughs possible. The preliminary research suggests that to fully realize the economic gains associated with innovation, new products and services developed by American innovators must be scaled-up within the US economy, as well as in overseas markets. The four suggestions that have been made include the following: increase financing options for later-stage development; create institutions and incentives; change the contours of market demand; and encourage firms to raise capital through initial public offerings.

CULTURAL VALUES, MARKET INSTITUTIONS, AND ENTREPRENEURSHIP POTENTIAL: A COMPARATIVE STUDY OF THE UNITED STATES, TAIWAN, AND VIETNAM

2009 ◽  
Vol 14 (01) ◽  
pp. 21-37 ◽  
Author(s):  
THANG V. NGUYEN ◽  
SCOTT E. BRYANT ◽  
JERMAN ROSE ◽  
CHIUNG-HUI TSENG ◽  
SUPARA KAPASUWAN
Keyword(s):  
United States ◽  
Cultural Values ◽  
Interaction Effect ◽  
New Ventures ◽  
The United States ◽  
Institutional Factors ◽  
Future Research ◽  
Market Institutions ◽  
The Us ◽  
The Impact

This study examines the impact of national cultural values and the development of market institutions on three aspects of entrepreneurship (desire, intention, and confidence in creating new ventures). We ask: What different kinds of effects do cultural and institutional factors have on different aspects of entrepreneurship? Our samples come from Vietnam, Taiwan, and the United States (US). The use of three countries allows us to distinguish the separate influences of culture and market institutions on entrepreneurship. Our results suggest that only culture has a significant impact on individuals' desires to create new ventures. However, we found mixed results on whether culture or institution affects individuals' intentions and confidence in creating new ventures. Contrary to our hypotheses, the Vietnam sample had higher scores on intention to create new ventures than both the US and Taiwan samples. The Vietnam sample was also higher than Taiwan on the confidence in creating new ventures. This may suggest an interaction effect of cultural and institutional factors on entrepreneurship. This interaction deserves more attention in future research.

“Success by Association”: The Impact of Venture Capital Firm Reputation Trend on Initial Public Offering Valuations

2019 ◽  
Vol 47 (2) ◽  
pp. 368-398 ◽  
Author(s):  
Salim Chahine ◽  
Igor Filatotchev ◽  
Garry D. Bruton ◽  
Mike Wright
Keyword(s):  
Venture Capital ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Central Element ◽  
The United States ◽  
Firm Reputation ◽  
Public Offerings ◽  
Experience Intensity ◽  
Public Offering ◽  
The Impact

Organizational theory recognizes reputation as a central element to understanding the firm. Examining investor valuations of 1,676 initial public offerings (IPOs) in the United States from 1990 to 2011, we find that reputation transfer through an association of an IPO firm with a venture capital (VC) firm represents a resource whose value can increase/decrease over time depending on investors’ valuations of prior IPOs funded by a VC firm. We conclude that the impact of reputation transfer through association is not unidirectional but, instead, is to be viewed in the context of prior reputational development of organizations the focal firm is associated with. Furthermore, we find that three “transfer enhancers” can improve the impact of VC firm reputation transfer on IPO valuations, including the VC firm’s past experience intensity, the diversity of IPO experiences, and the number of prior syndicated IPOs involving the VC firm as a lead investor.

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