Post-IPO Geographic Expansion

64 Pages Posted: 19 Jan 2021

See all articles by Jess Cornaggia

Jess Cornaggia

Pennsylvania State University - Department of Finance

Matthew Gustafson

Pennsylvania State University - Smeal College of Business

Jason D. Kotter

Brigham Young University - Department of Finance

Kevin Pisciotta

University of Kansas - School of Business

Date Written: December 31, 2020

Abstract

Transitioning to public ownership affects where firms invest. Post-IPO, we find that firms conduct more geographically diversifying acquisitions on the intensive and extensive margins, relative to both withdrawn IPO filings and seasoned matched peers. The effect is larger for IPO filers that are large relative to their local economy, and smaller for IPOs led by less active underwriters. We find little evidence of geographic expansion after seasoned equity offerings, suggesting that capital raised does not drive the expansion decision. Our results suggest that going public alleviates significant geographic-based information frictions faced by private firms.

Keywords: Initial Public Offerings, M&A, Geographic Expansion, US Census

JEL Classification: G20, G30, G32, G34

Suggested Citation

Cornaggia, Jess and Gustafson, Matthew and Kotter, Jason D. and Pisciotta, Kevin, Post-IPO Geographic Expansion (December 31, 2020). Available at SSRN: https://ssrn.com/abstract=3756590 or http://dx.doi.org/10.2139/ssrn.3756590

Jess Cornaggia

Pennsylvania State University - Department of Finance ( email )

University Park, PA 16802
United States

HOME PAGE: http://jesscornaggia.com

Matthew Gustafson

Pennsylvania State University - Smeal College of Business ( email )

East Park Avenue
University Park, PA 16802
United States

Jason D. Kotter

Brigham Young University - Department of Finance ( email )

United States

Kevin Pisciotta (Contact Author)

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
29
Abstract Views
151
PlumX Metrics