Initial Public Offerings and the Acquisition of Newly-Public Firms

Ragozzino, R., and Reuer, J. Initial Public Offerings and the Acquisition of Entrepreneurial Firms. 2007. Strategic Organization, Vol. 5: 155-176

38 Pages Posted: 12 Apr 2007 Last revised: 8 Apr 2014

See all articles by Roberto Ragozzino

Roberto Ragozzino

University of Liverpool; University of Tennessee

Jeffrey J. Reuer

Purdue University - Krannert School of Management

Abstract

Information asymmetries between buyers and sellers can create inefficiencies in M&A markets and prevent acquirers from gaining access to valuable resources and capabilities via acquisitions. Entrepreneurial firms face similar problems in raising external capital, due to the asymmetric information that separates them from prospective investors. In this paper, we bring together the strategy, financial economics, and entrepreneurship literatures and exploit the IPO context to examine the informational characteristics of newly-public entrepreneurial firms. We construct hazard models that offer strong evidence that certain IPO characteristics signal the value of entrepreneurial firms and thereby attract M&A suitors.

Keywords: Entrepreneurship, acquisition, IPO, M&A

JEL Classification: G3, M13

Suggested Citation

Ragozzino, Roberto and Reuer, Jeffrey J., Initial Public Offerings and the Acquisition of Newly-Public Firms. Ragozzino, R., and Reuer, J. Initial Public Offerings and the Acquisition of Entrepreneurial Firms. 2007. Strategic Organization, Vol. 5: 155-176 . Available at SSRN: https://ssrn.com/abstract=979288

Roberto Ragozzino (Contact Author)

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

HOME PAGE: http://https://www.liverpool.ac.uk/management/staff/roberto-ragozzino/

University of Tennessee ( email )

The Boyd Center for Business and Economic Research
Knoxville, TN 37996
United States

HOME PAGE: http://robertoragozzino.com

Jeffrey J. Reuer

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

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