Commercialization Strategy and IPO Underpricing

29 Pages Posted: 11 May 2017 Last revised: 18 Jun 2019

See all articles by Serena Morricone

Serena Morricone

SDA Bocconi

Federico Munari

University of Bologna - Department of Management

Raffaele Oriani

Luiss Guido Carli University

Gaétan de Rassenfosse

Ecole Polytechnique Fédérale de Lausanne

Date Written: 2017

Abstract

This paper studies the interplay between two defining features of technology-based firms: licensing as a commercialization strategy and the reliance on equity financing. Within the context of an IPO, we argue that the technology commercialization strategy of a firm going public affects information asymmetries and, therefore, IPO underpricing. In particular, we theorize that underpricing will be higher when a firm’s technology commercialization strategy is more based on licenses. We also posit that the size of the patent portfolio will mitigate this effect. Our results from a sample of 130 IPOs in the U.S. semiconductor industry confirm these predictions.

Keywords: Initial Public Offering (IPO), Underpricing, License, Patent, Semiconductor

JEL Classification: G32, L24, L63, M13, O32, O34

Suggested Citation

Morricone, Serena and Munari, Federico and Oriani, Raffaele and de Rassenfosse, Gaétan, Commercialization Strategy and IPO Underpricing (2017). Research Policy, Vol. 46, No. 6, 2017. Available at SSRN: https://ssrn.com/abstract=2966036 or http://dx.doi.org/10.2139/ssrn.2966036

Serena Morricone

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

Federico Munari

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, Bologna 40126
ITALY
051-2093954 (Phone)
051-2093949 (Fax)

Raffaele Oriani

Luiss Guido Carli University ( email )

Viale Romania, 32
Rome, 00196
Italy
+390685225908 (Phone)

Gaétan De Rassenfosse (Contact Author)

Ecole Polytechnique Fédérale de Lausanne ( email )

Station 5
Odyssea 1.04
1015 Lausanne, CH-1015
Switzerland

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