Global Diversification and IPO Returns

66 Pages Posted: 17 Aug 2013 Last revised: 17 Sep 2018

See all articles by David C. Mauer

David C. Mauer

University of North Carolina (UNC) at Charlotte

Song Wang

Saint Xavier University

Xiao Wang

University of Science and Technology of China

Yilei Zhang

University of North Carolina (UNC) at Charlotte

Date Written: January 2015

Abstract

A large number of newly listed firms have significant involvement in international business activity. In this paper, we examine the effect of international business activity on the pricing of initial public offerings (IPOs), post-IPO performance, and survival. In a large sample of U.S. IPOs over 1981 to 2012, we find that firms with exports and/or foreign sales prior to going public have significantly lower underpricing than matching firms without international business activity. Furthermore, firms with international business activity significantly outperform purely domestic IPO firms over three- and five-year periods after going public and have a significantly higher survival rate. Overall, we provide strong evidence that global diversification has an economically significant effect on the valuation and subsequent performance of firms going public.

Keywords: Initial public offering, Global diversification, IPO underpricing, IPO long-run performance, Survival analysis

JEL Classification: F23, G24, G32

Suggested Citation

Mauer, David C. and Wang, Song and Wang, Xiao and Zhang, Yilei, Global Diversification and IPO Returns (January 2015). Available at SSRN: https://ssrn.com/abstract=2310869 or http://dx.doi.org/10.2139/ssrn.2310869

David C. Mauer (Contact Author)

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States
704-687-7707 (Phone)

Song Wang

Saint Xavier University ( email )

Chicago, IL 60655
United States

Xiao Wang

University of Science and Technology of China ( email )

China

HOME PAGE: http://https://sites.google.com/site/xiaowangeconomics/

Yilei Zhang

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
212
Abstract Views
2,053
rank
151,251
PlumX Metrics