Post-IPO Actions and Firm Survival: More than Signaling?

40 Pages Posted: 19 Jan 2011  

K. Thomas Chandy

Santa Clara University - Leavey School of Business

Nagaraj Sivasubramaniam

Duquesne University - A.J. Palumbo School of Business Administration

Date Written: January, 19 2011

Abstract

Entrepreneurial firms, at their birth, have a high probability of failure due to the “liability of newness.” Even firms that surmount the initial challenges and get to the stage of issuing an initial pubic offering (IPO) still face a significant hazard rate. In this paper, we examine whether, in the post-IPO stage, strategic choice matters. We examine whether management actions following an IPO enhance the firm’s survival and, second, if they do, which actions really make a difference. We analyzed a sample of 104 internet-related firms that issued IPOs between 1995 and 1999, and find that management action in three areas - market expansion, entry into alliances, and expansion or reconfiguration of the top management team and/or board of directors - significantly enhance firm survival.

Keywords: Entrepreneurship, Strategic Choice, Initial Public Offering, Resources, Capabilities, Survival

Suggested Citation

Chandy, K. Thomas and Sivasubramaniam, Nagaraj, Post-IPO Actions and Firm Survival: More than Signaling? (January, 19 2011). SCU Leavey School of Business Research Paper No. 11-01. Available at SSRN: https://ssrn.com/abstract=1743706 or http://dx.doi.org/10.2139/ssrn.1743706

K. Thomas Chandy (Contact Author)

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States
510-673-2351 (Phone)

Nagaraj Sivasubramaniam

Duquesne University - A.J. Palumbo School of Business Administration ( email )

Pittsburgh, PA 15282
United States
412-396-6251 (Phone)
412-396-4764 (Fax)

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