IPO proceeds deployment and firm performance
Abstract Newly public incumbents (NPIs) experience negative price reactions to industry followers' initial public offerings (IPOs). We find that deploying IPO proceeds rapidly amplifies the negative impact of peer IPOs. These effects are larger for unprofitable NPIs and smaller for NPIs with better capital market access. Our findings underscore the importance of maintaining financial flexibility over the pursuit of a first‐mover advantage in shaping NPIs' performance.
Authors
- Mark R. Huson (ORCID: https://orcid.org/0000-0001-7891-7204)
- Chong Meng (ORCID: https://orcid.org/0009-0000-0981-4762)
Institutions
- University of Alberta (CA)
- Utah Valley University (US)
Publication Details
- Journal
- The Journal of Financial Research
- Published
- 2025-02-05
- DOI
- https://doi.org/10.1111/jfir.12458
- Citations
- 2
- Primary Topic
- Corporate Finance and Governance
- Type
- article
- Field-Weighted Citation Impact
- 7.82