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Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Using an international sample of IPO firms and two country-level measures of financial literacy, we find strong evidence that financial literacy is negatively associated with IPO underpricing. In cross-sectional analyses, we find that the effect of financial literacy in reducing IPO underpricing is more pronounced when the information environment is less transparent. Employing path analysis, we document that information friction, firm transparency, and stock market participation are mechanisms that mediate this relationship. Our study contributes to and extends the literature by providing strong evidence that citizens' financial literacy has an important and consistent influence on IPO underpricing. [ABSTRACT FROM AUTHOR]

A short squeeze occurs if borrowed shares are recalled and the short seller is unable to find another source of shares. This forces the short seller to terminate a position early. For most stocks, the probability of a short squeeze is very low. Short squeezes, however, are not unusual for the hardest to borrow stocks. For these stocks, trading costs from squeezes are high and have a significant impact on the returns to short selling. For hard-to-borrow stocks, short sellers also miss out on significant abnormal returns because squeezes force them to close positions. [ABSTRACT FROM AUTHOR]

This article provides a survey of China's initial public offering (IPO) market, focusing on IPO pricing, bids and allocation, and aftermarket trading. We show that strict regulations result in suppressed IPO offer prices and high initial returns, causing a high cost of going public. Investors treat IPOs as lotteries with extremely high short-term returns, with little attention to the long term. The auction selling method, however, works in the way it is supposed to. Mutual funds bid in a more informative way than other investors, and their advantages are unlikely to be due to underwriters' preferential treatment. We also discuss the latest registration-system reform. [ABSTRACT FROM AUTHOR]

We demonstrate that investors in initial public offering (IPO) firms value revenues and that the number of U.S. Securities and Exchange Commission (SEC) revenue recognition comment letters issued on the S-1 registration statement are positively associated with reported revenues. We also find that IPO managers report revenues opportunistically in the fiscal year just prior to the offer. In additional analysis, we find that discretionary revenues are associated with significantly higher first day IPO stock returns but significantly lower 1 year stock returns. Our results are consistent with the incentives of managers to report revenues opportunistically outweighing the higher monitoring and regulatory scrutiny pre-IPO. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Going public by merging with a Special Purpose Acquisition Company (SPAC) is much more expensive than conducting a traditional IPO. We rationalize why some companies merge with a SPAC by listing the potential benefits. We analyze the agency problems that certain SPAC features address. SPAC IPO investors and deal sponsors have earned remarkably high annualized average returns, although we warn that recent deals are likely to disappoint. Public investors in the merged companies have earned very low market-adjusted returns on an equally weighted basis, although high redemptions on the worst deals have limited the amount of money that they lost. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Retail investors' gambling preferences can affect the performance and turnover of IPO firms. Research on the relationship between IPO underperformance and turnover from the gambling preference perspective is very limited. Empirical results on gambling preferences show that it leads to the underperformance of IPO firms. IPO underperformance disappears after controlling for gambling preferences or turnover. For stocks with low gambling preferences, IPO underperformance and the turnover effect are almost negligible. They become significantly stronger as gambling preferences increase. It illustrates that turnover's impact on IPO underperformance essentially comes from gambling preferences. [ABSTRACT FROM AUTHOR]

What do stories of loss sound like 70 years after the Holocaust and how are they remembered in the places where the losses themselves occurred? When Steven Hopman returned to Poland in 2010, as part of the March of the Living's (MOL) Montreal contingent of survivors tasked with educating students about the Holocaust, he grappled with how best to narrate a coherent and shareable story. This article shares his struggle to go public with the 'salvaged remnants' of his experiences while detailing the strategies he employed to describe what was beyond loss and could not be shared. [ABSTRACT FROM AUTHOR]

Researchers are divided on whether shareholder agreements (SAs) improve or hurt firm value. We offer family firms as a context where SAs add value and explain why; SAs limit "superprincipal" agency conflicts between family owners and other family members. A panel of French firms and a second study of French Initial Public Offerings show shareholders value SAs more in family than in nonfamily firms. Among family firms, SAs add greater value when weak governance undermines family owners' resistance to other family members' demands. Our study helps reconcile competing theory about SAs and distinguishes superprincipal conflicts from other family-firm agency problems. [ABSTRACT FROM AUTHOR]

A firm's initial public offering (IPO) generates negative externalities for industry competitors. To mitigate this threat, incumbent firms manage their earnings downward, issue more negative management forecasts, and use a more negative disclosure tone when their industry peers file for an IPO. Negative accruals reverse when the threat subsides. Incumbents manage earnings more aggressively when costs are small and benefits are large, and when they follow negative disclosures of industry leading incumbents. Such strategic disclosure lowers incumbent firm valuation multiples and associates with more negative IPO firm media sentiment. IPO firms obtain lower offer prices, raise less capital, and are more likely to withdraw from the offering. They also invest less, hoard more cash, and experience lower profitability post-IPO, whereas incumbents experience higher profitability and market share growth. Our results highlight the role of strategic reporting on product market competition and identify a new cost of going public. [ABSTRACT FROM AUTHOR]

I use the staggered adoption of mandatory environmental, social, and governance (ESG) disclosure regulations around the world to explore the impact of ESG disclosure on initial public offering (IPO) underpricing. I find robust evidence that underpricing is substantially lower in countries with ESG disclosure mandates. High‐quality disclosure environments moderate and tougher liability standards amplify the negative association between ESG disclosure mandates and underpricing, which suggests that ESG disclosure mandates reduce information asymmetry and litigation risk. The impact of ESG disclosure mandates on underpricing is stronger in countries with more pronounced environmental, social, and governance concerns. [ABSTRACT FROM AUTHOR]

What happens to companies that file for an initial public offering (IPO), but withdraw and do not list? How long does the post‐IPO outcome take? These questions are investigated by analysing market, firm and offer characteristics of 334 withdrawn IPOs in Europe between 2001 and 2015. The majority of withdrawn IPOs is engaged in M&A, only few file for a second time IPO. These post‐IPO withdrawal outcomes happen shortly after the IPO filing. Private equity and venture capital‐backed firms are more frequently engaging in M&A or trading. The evidence suggests that the IPO may be used as a marketing mechanism, being one of several alternatives of exit. [ABSTRACT FROM AUTHOR]

We investigate the impact of financial sponsor backing [venture capital (VC) or private equity (PE)] on post‐initial public offerings (IPO) acquisition strategies of newly public companies. We find that PE‐backed newly public firms undertake nearly three times more acquisitions than VC‐backed ones and almost twice as many as non‐backed firms, indicating that acquisitions are a primary growth strategy for PEs. This result remains robust after addressing potential endogeneity concerns. Additionally, PE syndicate‐backed firms engage in transformative acquisitions, proxied by size, while VC‐backed firms prioritise organic growth through R&D spending. Moreover, PE‐backed acquirers experience significant positive long‐run post‐IPO stock returns, unlike VC‐backed acquirers. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the potential of Sharia status as ex ante information to signal the quality of an issuing firm by improving the decision-making process of potential investors when assessing initial public offerings (IPOs) in an environment where information asymmetry is pronounced. Potential investors face challenges in evaluating and determining the true value of IPO issues, which inherently influences their decision-making. Consequently, this results in pronounced price fluctuations in IPO shares, leading to higher underpricing. Design/methodology/approach: This study uses a sample of 350 IPOs listed on the Kuala Lumpur Stock Exchange (KLSE) between 2004 and 2021 to examine the signaling role of Sharia-compliance status. A three-model approach is used to ensure that the study's objectives are met. The first model investigates the effect of Sharia status on underpricing to determine whether the main beneficiary of such a signal is the investor or the issuer. The second model examines the effect of Sharia status on investor demand to determine if such a signal influences prospective investors' investment decision-making processes. The third model inspects the effect of Sharia status on investor divergence of beliefs to measure the signal's ability to reduce information asymmetry within the Malaysian IPO market. Findings: The Malaysian IPO market relies heavily on the fixed-price mechanism, which exacerbates high information asymmetry, affecting potential investors' behavior, asset price formation and return generation on the first day of listing. The study results indicate that Sharia status does not have any signaling role in the Malaysian IPO market. This is because investors in the Malaysian market are driven by ex ante information that helps unveil relevant information that leads to capital gains. Furthermore, most new issues in the Malaysian IPO market fall under Sharia status, diluting the relevance of such information for prospective investors in determining profitable investments. Practical implications: The findings highlight the challenges faced by issuing firms in estimating market demand due to limited premarket insights and the difficulties prospective investors face in identifying the quality of issuing firms. Efforts to provide more information on investor demand can reduce uncertainty and facilitate more informed decision-making. Originality/value: This research stands as one of the pioneering efforts to provide an empirical explanation of the potential signaling influence of Sharia status in an emerging IPO market. [ABSTRACT FROM AUTHOR]

Our study examines whether Venture capitalists (VCs) prefer independent or syndicated investments when faced with exit uncertainty. By exploiting an initial public offering (IPO) suspension in China, our analysis reveals that VCs are more likely to independently invest in start-ups during such a suspension, which is driven by the screening and monitoring roles of VCs. Specifically, we find a greater likelihood of VC exits and a higher return on investment for VCs investing in start-ups during the suspension. Further, start-ups that obtain financing from VCs during the suspension are strictly monitored by VCs and reduce the extent of upward earnings management in the pre-IPO year. [ABSTRACT FROM AUTHOR]

FactSet is a comprehensive database for financial, economic, and industry data and research. It is increasingly being used by researchers and students at academic institutions. The database contains a wide range of content and formats, including data, news, filings, and research reports. FactSet sources data from various places and provides clear documentation and citations for each dataset. It also offers guides, tutorials, and training resources for new users, including a financial research certification program. The platform has a user-friendly interface and customizable features, but training is needed to fully utilize its features. FactSet's search and filter features are powerful but may be confusing for novice users. The most powerful research tool in FactSet is the "Screening" tab, which allows users to filter down companies, securities, and funds based on specific criteria. FactSet's pricing is on the high end but is reasonable considering the amount of data and analysis features provided. FactSet's main competitors are Bloomberg Terminals, LSEG Workspace, and S&P Capital IQ, but FactSet distinguishes itself with its institution-wide remote access and intuitive user interface. FactSet is a useful resource for financial research and analysis in academic and business settings, particularly for buy-side and sell-side analysts. It is beneficial for business students and faculty in teaching and research. Overall, FactSet is a great choice for companies and universities in need of large amounts of financial data. [Extracted from the article]

IPO firms in the technology industry are regarded as vulnerable due to their limited resources, inexperience, and relatively short technology and product lifecycles. They also lack a track record to signal to the market that they are equipped with sufficient ability to overcome the challenges faced in this highly competitive environment. This study examines whether board diversity helps IPO firms perform better in such a challenging environment; furthermore, we explore the potential contingencies that magnify or weaken the benefits of board diversity by examining how its impact is moderated by firm size and board tenure. Using a sample of 363 IPO events within technology firms over 11 years, we find that higher board diversity is associated with better post-IPO performance; however, a larger firm size and longer board tenure decrease the value created by board diversity. The findings are robust to alternative measures of performance and board diversity. Our study contributes to the literature by demonstrating the significant impact of board diversity on the performance of technology IPO firms as well as explaining the conditions under which boards effectively execute their resource dependence roles. [ABSTRACT FROM AUTHOR]

This article empirically examines how relative exploration affects high-tech companies' initial public offering (IPO) performance. Analysis of data from 225 high-tech companies listed in the SSE Sci-Tech innovation board (SSE STAR) market shows that high-tech companies with high exploratory innovation tend to generate inferior IPO performance compared to those with high exploitative innovation. Further, we explore the moderating effects of political ties and university cooperation from the triple helix perspective. Results suggest that political ties and university cooperation can alleviate the negative relationship between relative exploration and IPO performance. These findings contribute to the literature on how exploration-exploitation affects external financing by integrating exploration-exploitation and triple helix interactions research. These offer important practical implications for high-tech companies in China. [ABSTRACT FROM AUTHOR]

Copyright of Environmental & Social Management Journal / Revista de Gestão Social e Ambiental is the property of Environmental & Social Management Journal and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: This study aims to examine the impact of the International Financial Reporting Standards (IFRS) mandate and differences in national institutional quality on the underpricing of Initial Public Offering (IPO) companies. Design/methodology/approach: Multiple Difference-in-Differences (DiD) ordinary least squares estimations were conducted for 100 corporations listed on the Saudi Arabian stock market using country-level institutional quality data from 2005 to 2017. Findings: IFRS requirements and improvements in institutional quality have a combined effect on minimizing IPO underpricing. The analysis of the combined impact of IFRS requirements and differences in transparency revealed that IPO vendors leave $5 on average for IPO investors to cash out post the IFRS mandate, compared to $29 previously. Thus, IFRS serves as a quality certification instrument that alleviates IPO investors' ex ante uncertainties, even in nations with undeveloped institutions. Practical implications: The findings may be beneficial to researchers and policymakers. The results suggest that institutional quality enhancements and obligatory IFRS implementation highlight IFRS's synergistic influence on the IPO market. While European harmonization efforts drove the adoption of IFRS in Europe in 2005, Saudi Arabia's adoption of IFRS is not being driven by such initiatives (Daske et al., 2008; Persakis and Iatridis 2017). In reality, when IFRS was officially imposed in Saudi Arabia in 2008, it, like many other emerging market nations, made considerable reforms to its formal institutions. However, research on the combined impact of IFRS and disparities in institutional quality in emerging IPO markets remains sparse. Emerging markets represent more than half of economies that use IFRS. Therefore, to the best of the authors' knowledge, this study is the first to conduct an empirical investigation to identify this combined effect in emerging countries using the DiD analytical technique. Equity market legislators remain concerned regarding IPO underpricing, as it has a detrimental influence on economic growth (Bova and Pereira, 2012; Jamaani and Ahmed, 2021; Mehmood et al., 2021). Depending on the degree of information asymmetry in national stock markets, underpricing costs increase the cost of going public for entrepreneurs. Consequently, prospective private firms are discouraged from accessing equity financing through the stock markets. This is likely to impede private sector development plans, causing a negative effect on economic growth. Originality/value: Emerging countries represent over 50% of the IFRS mandating economies. However, there is insufficient research on the combined effect of IFRS requirements and improvements in institutional quality in developing IPO markets. To the best of the authors' knowledge, this study is the first empirical attempt to identify this combined effect in one of the largest developing countries. The results may aid academics and policymakers in better understanding the interaction between these two variables. [ABSTRACT FROM AUTHOR]

Purpose: Press reports have indicated that firms frequently underprice restricted stock and employee stock options. I test for underpricing of stock and options. Design/methodology/approach: I examined a sample of 5,333 private firm stock and option issuances between 1985 and 2017. I tested for underpricing using two approaches: assuming investors have no special market-timing ability and assuming instead they have perfect market-timing ability. Findings: I find evidence of widespread stock and option underpricing by private firms before they go public reflecting large discounts that exceed reasonable compensation for lack of marketability. Unreported underpricing is more frequent in the last pre-IPO private equity transactions that offer the last opportunity to give such discounts before the stock is publicly traded, but the discounts are greater in the earlier pre-IPO transactions where unreported discounts are presumably tougher for the SEC to detect. Underpricing is still detected even when the actual DLOMs are tested against a benchmark that assumes investors have perfect market-timing ability. Research limitations/implications: Firms frequently underprice restricted stock and employee stock options. Firms tend to underprice stock options more frequently than restricted stock, but restricted stock tends to be priced at deeper discounts when recipients are assumed not to have any special market-timing ability. Practical implications: Private firms issue restricted stock and options as incentive compensation. Lowballing the valuation transfers wealth from outside stockholders to employees/insiders. Wealth transfers take place through the issuance of equity claims to employees/insiders before firms go public. I found that more than a quarter of the DLOMs exceed the theoretical maximum by, on average, between 16% (median) and 20% (mean). This finding raises two questions worthy of investigation. First, to what extent do the frequency and magnitude of DLOMs above the theoretical maximum depend on whether a board of directors obtains an independent appraisal of a stock's fair market value? Second, if DLOMs above the theoretical maximum are observed even when the stock is independently appraised, how do appraisers justify such large DLOMs? Social implications: The wealth transfers that take place through the issuance of equity claims to employees/insiders before firms go public benefit employees/insiders at the expense of outside shareholders. Originality/value: My paper is the first to furnish evidence of widespread stock and option underpricing by private firms before they go public; demonstrate that the unreported underpricing is more frequent in the last pre-IPO private equity transactions that offer the last opportunity to give such discounts before the stock is publicly traded and show that the discounts are greater in the earlier pre-IPO transactions where unreported discounts are presumably tougher for the SEC to detect. [ABSTRACT FROM AUTHOR]

Venture capital firms (VCs) provide certification and monitoring services to the initial public offering (IPO) companies they finance, as has been well documented in the academic literature. Yet, there are few studies that explore what role – if any – VCs play when an IPO company is subsequently acquired, particularly if that acquisition is legally contested. Using a sample of 721 merger and acquisition (M&A) offers for US VC‐backed IPO companies, announced between 1996 and 2018, we find that a takeover bid that occurs in the presence of the lead VC commands a higher target firm valuation and is less likely to be legally contested than a bid for a company from which the lead VC has already exited. In addition, companies in which the lead VC is present enjoy higher stock‐price returns in response to M&A announcements. Our results provide new evidence regarding VC certification and monitoring – including its role as a litigation deterrent – long after the IPO. [ABSTRACT FROM AUTHOR]

This study assessed the capability of the historical simulations of phase 5 and 6 of the Coupled Model Intercomparison Project (CMIP5/6) in reproducing the temporal and spatial characteristics of the Interdecadal Pacific Oscillation (IPO) and its impact on global surface air temperature (SAT), surface equivalent potential temperature (Thetae_sfc) and precipitation. The IPO index time series simulated by CMIP5/6 models deviated from observations and struggled to capture the phase evolution characteristics of the IPO. Nevertheless, CMIP5/6 models successfully captured the horseshoe‐shaped sea surface temperature anomaly in the Pacific. Additionally, the CMIP5/6 models were able to simulate the IPO's 10–30‐year period. Notably, the simulated IPO index exhibited a statistically significant upward trend, which was absent in observations. Additionally, the IPO‐related global land SAT, Thetae_sfc and precipitation simulated by CMIP5/6 models performed differently in boreal winter and boreal summer. Furthermore, the IPO‐related global land SAT performed better in CMIP5/6 models during boreal winter than that in boreal summer. In CMIP6 models, it improved during both boreal winter and summer compared to CMIP5 models. In terms of the IPO‐related global land Thetae_sfc, CMIP5/6 models also performed better during boreal winter than in boreal summer. However, CMIP5 models outperformed CMIP6 models during the boreal summer. In terms of the IPO‐related global land precipitation, CMIP5/6 models performed better during boreal summer compared to boreal winter. Moreover, the IPO‐related global land precipitation in CMIP6 models improved significantly in boreal winter, but almost the same in boreal summer, compared to CMIP5 models. Further studies showed that the enhancements in simulating IPO's spatial pattern did not correspond to improvements in the model's ability to simulate IPO's global teleconnections. [ABSTRACT FROM AUTHOR]

The registration-based initial public offering (IPO) system is a pivotal initiative in China's comprehensive capital market reform, but little is known about its effectiveness. Our study aims to explore the impact of the registration-based IPO reform on enterprises' environmental, social, and governance (ESG) greenwashing behaviors. Drawing on data from 2,490 enterprises listed on the Chinese growth enterprise market and the main board of the Shenzhen Stock Exchange during 2012-2022, we find that the registration-based IPO reform significantly aggravates ESG greenwashing with an effect of 0.1696. Building upon this evidence, we explore the underlying mechanism. Peer competition and retail investor sentiment play a partial mediating role and become two channels through which the registration-based IPO reform may aggravate enterprises' ESG greenwashing. Analysts' attention can alleviate the impact of registration-based IPO reform on enterprises' ESG greenwashing while management myopia intensifies it, and they both play a moderating role. Moreover, the aggravating effect of the registration-based IPO reform on ESG greenwashing is more pronounced in enterprises belonging to heavily polluting industries, in the Western region, and with low information transparency. Thus, our findings offer new insights into enterprises' ESG greenwashing behaviors in the context of the registration-based IPO reform. [ABSTRACT FROM AUTHOR]

Overseas listings by domestic firms are one of the ways for a country to attract foreign capital. China leads the world in the number and value of overseas listings. This paper documents the evolution of Chinese firms' initial public offerings outside mainland China. We pay special attention to the role of the listing criteria of various exchanges in this evolution. We discuss important reforms of the listing requirements in both mainland and Hong Kong and their effects on the listing location choices by Chinese firms. Finally, we examine the delisting pressure on Chinese stocks from the US exchanges from both the Chinese and US authorities. [ABSTRACT FROM AUTHOR]

This contribution aims to address the intriguing issue of whether Industry 4.0, as a techno-economic paradigm shifter, may have a greater potential for exaptation (i.e., using it not for pursuing of quantitative but that of qualitative development) and, if so, what technologies may accelerate this process. Existing research indicates that graphene technology has the potential to lead the way in this area. The paper addresses not only why and how a graphene-aided Industry 4.0 can be conducive to this function (i.e., making exaptations easier on a larger scale), it examines the wider context for exaptations by questioning whether the current setup of the real economy, the financial universe, and the public sector offers a supportive environment for exaptations. [ABSTRACT FROM AUTHOR]

This paper uses business segment revenue data to examine the determinants of firm diversification over firm life cycles and whether diversification affects the survival of the firm. I analyze the life cycles and diversification choices of 727 firms that had their initial public offerings in 1998 and 1999 for twenty-one years. The results of this paper provide evidence of the life cycle theory of diversification in that firms are more likely to be diversified in the Mature life cycle stage and less likely to be diversified in the Introduction stage, regardless of the firm's age. The paper's results also support the agency theory of diversification, as diversifying firms are less likely to be acquired but not less likely to have a negative ending. A higher degree of diversification is related to a decreased likelihood of the firm being acquired. Firms that focus on creating growth opportunities with their diversification are less likely to be acquired than those that diversify by growing their existing business segments. JEL classification codes: G3, G32, G33, G34 [ABSTRACT FROM AUTHOR]

On 18 November 2021, Paytm, India's leading digital payments and financial services company, went public, but its shares were listed at a surprising 9% discount from the initial price. This underperformance of Paytm's highly anticipated ₹183 billion IPO, the largest in India, stunned the market despite the BSE Sensex index hitting an all-time high in October 2021 with a 50% increase over the previous year. While other unicorns like Zomato (thirty-eight times oversubscribed) and Nykaa (nearly eighty-two times oversubscribed) saw tremendous success in the capital market, Paytm struggled on the stock exchange. This raised questions about why a prominent brand with 3.33 billion customers could not effectively engage with stakeholders and failed to excite investors as Zomato and Nykaa did. Raghavendra Das, a communications consultant seeking to work with Paytm, assessed the company's communication strategy and shared insights with MD and CEO Vijay Shekhar Sharma. The big question now is, what steps should Paytm and Sharma take next? [ABSTRACT FROM AUTHOR]

Purpose: This study seeks to explore the intricate relationship among supply chain transparency, digitalization and idiosyncratic risk, with a specific focus on newly public firms. The objective is to determine whether supply chain transparency effectively mitigates idiosyncratic risk within this context and to understand the potential impact of digitalization on this dynamic interplay. Design/methodology/approach: The study utilizes data from Initial Public Offerings (IPOs) on China's Growth Enterprise Board (ChiNext) over the last five years, sourced from the CSMAR database and firms' annual reports. The research covers the period from 2009 to 2021, observing each firm for five years post-IPO. The final sample comprises 2,645 observations from 529 firms. The analysis employs the Hausman test, considering the panel-data structure of the sample and favoring fixed effects over random effects. Additionally, it applies the high-dimensional fixed effects (HDFE) estimator to address unobserved heterogeneity. Findings: The analysis initially uncovered an inverted U-shaped relationship between supply chain transparency and idiosyncratic risk, indicating a delicate equilibrium where detrimental effects diminish and beneficial effects accelerate with increased transparency. Moreover, this inverted U-shaped relationship was notably more pronounced in newly public firms with a heightened level of firm digitalization. This observation implies that firm digitalization amplifies the impact of transparency on a firm's idiosyncratic risk. Originality/value: This study distinguishes itself by providing distinctive insights into supply chain transparency and idiosyncratic risk. Initially, we introduce and substantiate an inverted U-shaped correlation between supply chain transparency and idiosyncratic risk, challenging the conventional linear perspective. Secondly, we pioneer the connection between supply chain transparency and idiosyncratic risk, especially for newly public firms, thereby enhancing comprehension of financial implications. Lastly, we pinpoint crucial digital conditions that influence the relationship between supply chain transparency and idiosyncratic risk management, offering a nuanced perspective on the role of technology in risk management. [ABSTRACT FROM AUTHOR]

Copyright of Hacettepe University Journal of Economics & Administrative Sciences / Hacettepe Üniversitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Hacettepe University, Faculty of Economic & Administrative Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

At the time of an initial public offering (IPO), firms seek to maximize their stock market value. The authors theorize and show that a firm's innovation potential—firm outputs and activities that contribute to the development of future new products—can be used by the managers of IPO firms as a credible signal of the quality of the firm. Using a sample of 370 IPO firms from the consumer-packaged goods and pharmaceutical industries, and three metrics of innovation potential, the authors show that firms' innovation potential is (1) positively associated with the initial value of the IPO and with the first-day IPO returns and (2) negatively associated with the extent to which insiders sell their shares at the time of the IPO. The effectiveness of the three metrics of innovation potential as a signal of firm quality varies: patents have a stronger impact on insider sales than preannouncements and generic references to future innovation, while preannouncements have the strongest impact on first-day IPO returns. The article presents a nuanced view of the extent to which various firm stakeholders consider information about firms' innovation potential to be a credible signal that reduces the adverse selection present in IPO deals with insider sales. [ABSTRACT FROM AUTHOR]

In the past two decades, there has been a decline in the use of uniform-price auctions in favor of fixed prices in markets of peer-to-peer lending, equity crowdfunding, and initial public offerings. This article aims to analytically study why this trend might be occurring. The analysis reveals that, relative to a fixed price, a uniform-price auction leads to more herding and strategic delay of bid submission and, consequently, a smaller transaction completion probability and lower expected revenue. These predictions are consistent with the empirical regularities observed for the bidding behavior and funding outcomes on Prosper, one of the leading peer-to-peer online lending platforms, and those documented in the literature for markets of equity crowdfunding and initial public offerings. [ABSTRACT FROM AUTHOR]

This study investigates why and how family firms go public via initial public offering (IPO) and explores how family firms' distinctive traits contribute to specific IPO behavior. The results show that family firms face IPO following three paths— shine, continue, and challenge. Family IPO firms emphasize control, identification, and succession (shine); focus on family social capital, responsibility toward stakeholders, and family business identity (continue); and highlight control, identification, new leaders' self-affirmation, and generational transfers (challenge). We uncover the complexities of emotional endowment—a reference point for making IPO decisions and a resource or constraint to engage in the IPO process. [ABSTRACT FROM AUTHOR]

I study venture capital firms' (VCs) use of public market information and how attention to this information relates to private market investment outcomes. I link web traffic to public filings hosted on EDGAR to individual VCs. VCs analyze public information about industry peers before most deals. An increase in industry filing views relates positively to the probability of an exit through acquisition, suggesting that public information helps identify paths to acquisition. The effect is stronger when the VC has less access to private information, especially for low-reputation VCs. Policymakers should consider spillover effects on private markets when setting public disclosure requirements. [ABSTRACT FROM AUTHOR]

Growth and innovation are primary arguments for firms that aim to go public and access resources from the stock market. So it is ironic that going public is, for a majority of firms, associated with a pronounced slump in breakthrough innovation. This article proposes an actionable, marketing-related explanation for why some firms that go public manage to beat the post–initial public offering (IPO) innovation slump: innovation imprinting. The authors argue and demonstrate that firms that engage in innovation imprinting before going public attract a segment of concordant investors whose risk preferences are more supportive of breakthrough innovation than investors at large. These investors, in turn, reward the firms' continued introduction of breakthrough innovations after they have gone public. By analyzing the innovation patterns of 207 firms in the consumer packaged goods sector before and after an IPO, the authors observe that one-third of firms are able to maintain or beat their pre-IPO levels of breakthrough innovations after going public. By studying their actions, the investors they attract, and their financial performance and survival rates, the authors provide empirical evidence for the importance of innovation imprinting and concordant investors in helping firms beat the post-IPO innovation slump. [ABSTRACT FROM AUTHOR]

This article documents the partial shift from the government-based approval system to the market-based registration system and uses a stochastic frontier model with inefficiency heterogeneity (SFMH) to separate the component of IPO initial returns into premarket underpricing and aftermarket mispricing, then examines the effect of the implementation of registration system on premarket and aftermarket pricing efficiency, respectively. The results show that the premarket underpricing is lower but the aftermarket mispricing is higher under the registration system than under the approval system. Overall, this article indicates that the implementation of registration system has improved the IPO pricing efficiency of the premarket but reduced that of the aftermarket. [ABSTRACT FROM AUTHOR]

Initial Public Offerings (IPOs) provide great opportunities for companies to grow and expand, and they allow investors to invest their money wisely to get a decent Return on Investment (ROI) in the short term. Nevertheless, the intricate nature of the stock market is susceptible to several influences such as a company's financial statement, governmental regulations, and public sentiment, which hinders the attainment of a satisfactory ROI. This study aims to address this challenge by developing a model that combines public sentiment analysis and machine learning approaches to optimize the ROI for IPO trends. The study gives a novel approach that uses multiple different features associated with IPOs like the public opinion, grey market price (GMP), issue prices, lot size etc. and leverages the use of various machine learning techniques like Random Forest, Decision Tree, Naive Bayes, and K-Nearest Neighbour (KNN) to make well-informed investment recommendations. The testing results demonstrate that the Decision Tree method surpasses the other algorithms, with an accuracy rate of 82.3%. This discovery emphasizes the effectiveness of our method in forecasting the success of IPOs by utilizing a combination of sentiment analysis and crucial financial indicators. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of manager-investor interaction quality on stock returns by utilizing an online IPO roadshow dataset and leveraging a word-embedding model. We find that such interactions are positively valued, as reflected in initial returns. The effect is particularly pronounced for firms characterized by higher levels of information asymmetry, greater investor attention, increased question uncertainty, or discussions on topics not covered in prospectus. Additionally, our research reveals that effective management communication leads to increased first-day turnover rates and thus higher returns. These heightened returns persist up to 180 days following the IPO, without displaying a significant long-term reversal associated with interaction quality. These findings underscore the meaningful impact of the quality of manager-investor interactions on firm valuation. [ABSTRACT FROM AUTHOR]

Dual-class companies are often touted as an example of contractual customization of corporate governance, based on the view that they deviate from the default rule of "one share, one vote" to fit the specific characteristics of individual companies. But voting inequality is a spectrum, not a binary choice, and we know little about how different dual-class companies choose their level of voting inequality along this spectrum. In this Article, I seek to shed light on this phenomenon by presenting and discussing quantitative and qualitative data on dual-class IPOs, including a comprehensive sample of dual-class charters and a survey of capital markets lawyers with expertise in dual-class IPOs. The corporate charters analyzed span 27 years, from 1996 to 2022, and the survey respondents include more than three dozen partners of law firms that have represented over two-thirds of the U.S. dual-class companies that have gone public in the past decade. This Article has three main goals. The first is to map the dual-class landscape and to document standardization and customization of voting inequality across almost 300 companies and three decades. The second is to reconstruct the "contracting process" that shapes dual-class charters and the role of key market players in this process. The third is to situate this real-world picture within the standard framework of the "classic contractarian theory," the richer and more nuanced insights of "modern contractarian theories," and the work of sociologists and economists on the emergence and evolution of social norms. The resulting picture shows that, despite a broad spectrum of possible tailor-made options, most dual-class companies choose similar or identical levels of voting inequality, innovation in market practice happens quite rapidly after long periods of equilibrium, and lawyers perceive themselves as playing a much more important role than investment bankers in shaping the "dual-class contract." I suggest that both the traditional account of contractual optimization and the more nuanced theories of learning externalities and agency problems are insufficient to explain some peculiarities of dual-class contracting. I propose an alternative conjecture in which "market norms" play an important role alongside atomistic contracting, lawyers serve a crucial sociological function as transmitters of these norms, and "norm innovation" happens less through rational design than through random mutation and the deliberate action of "norm entrepreneurs." [ABSTRACT FROM AUTHOR]

Recent scandals have brought rankings to the forefront of the legal profession. Several of the most prestigious academic institutions have withdrawn from being ranked, citing the problematic nature of the rankings. However, rankings persist for both legal academics and practice, and there is substantial sentiment to improve the methodologies, with little detail as to how to improve. In this paper, we rank law firms on their clients' IPO performance. We focus on the most relevant outcomes: litigation, first-day returns, disclosure, and legal fees. The focus on these measures provides benefits relative to other methodologies, which typically focus on inputs or size-related characteristics. Namely, this ranking is less manipulable and more accurately captures performance metrics that matter most to clients' shareholders. Our rankings control for observable and unobservable deal characteristics, which helps ensure we capture law firm quality, not client traits. With the rankings based on legal fees, potential clients can compare the benefits of a particular law firm (e.g., lower litigation or higher selling prices) against the additional cost of hiring a higher-quality law firm. Hence, our rankings allow for a value-for-the-money comparison of law firms for clients selling shares in an IPO. [ABSTRACT FROM AUTHOR]

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In initial public offerings (IPOs), underpricing refers to pricing the issue at a price lower than its fair value which results in the listing price being much higher than the issue price. This higher information asymmetry results in more underpricing. To reduce such asymmetry, the Securities and Exchange Board of India (SEBI) introduced IPO grading and anchor investor participation in India. This article aims to assess the impact of these two factors on the underpricing of Indian IPOs over 2007–2017. This study uses multivariate regression analysis to compare the impact of graded versus ungraded IPOs and of anchor-backed versus non-anchor backed IPOs on underpricing; it finds that IPO grading and anchor investment do not have a significant overall impact on underpricing. These results justify the scrapping of mandatory IPO grading. Although insignificant, IPO grading has a greater influence on underpricing than anchor investor participation. Furthermore, the current study also analyses the subscription patterns of qualified institutional buyers (QIBs), non-institutional investors (NIIs) and retail individual investors (RIIs) and their influence on one another. Accordingly, it reveals that QIB subscription influences both NII and RII subscriptions. [ABSTRACT FROM AUTHOR]

This study conducts a systematic literature review of San Diego’s innovation ecosystem to analyse its evolution, dynamics, the most influential (key) stakeholders, and success factors. 1,405 documents from Scopus and 809 documents from Web of Science (WoS) were retrieved and analysed to obtain a final sample of twenty articles. The ecosystem’s key organisational stakeholders were identified as UC San Diego, research institutes, venture capitalists, pioneer and leading companies and intermediary organisations. Regarding success factors, key political factors include research funding, other public funding and policies that foster, for example, the actors’ geographical proximity. Key economic factors include start-up support systems, company acquisitions and initial public offerings (IPOs). Several vital social factors, such as collaboration, social networks and risk-taking culture, were also identified. Finally, the key technological success factors include technology transfer, specific focus areas and critical mass in research and development. This systematic review, complemented by expert interviews, provides a comprehensive view and validation of the stakeholders and factors that have contributed to the emergence, evolution and dynamics of the innovation ecosystem. The study also exemplifies an originally nonleading city’s path to success, which can provide valuable innovation policy and planning insights for other nonleading regions. [ABSTRACT FROM AUTHOR]

Emerging market IPO companies have a unique position in these markets, often representing the forefront of innovation and development. In the context of research, this article aims to investigate the relationship between CEO characteristics and R&D expenditures of IPO companies in emerging markets. The importance of this topic was emphasized, as emerging market IPO companies play a crucial role in economic development and innovation, and CEO characteristics may have an impact on the company’s research and development expenditures. This article focuses on the personal characteristics of CEO, such as their educational background, age, work experience, shareholding ratio in equity incentive plans, and CEO turnover, and proposes a series of hypotheses, including the relationship between these characteristics and R&D(Research and Development) expenses. In terms of research methods, this article mentions the quantitative research methods used, including data collection, variable measurement, and statistical analysis. These methods will be used to validate a series of hypotheses, including the relationship between educational background and R&D expenditure, age and R&D expenditure, work experience and R&D expenditure, equity incentive plan shareholding ratio and R&D expenditure, as well as the relationship between CEO turnover and R&D expenditure. [ABSTRACT FROM AUTHOR]