Innovation, Appropriability, And The Underpricing Of Initial Public Offerings
Academy of Management JournalPublished 1 February 2007
Michael B. Heeley, Sharon F. Matusik, Neelam Jain
Citations276
SJR quartileQ1
SJR score10.53
SNIP3.95
Generate an AI Snapshot to get a quick, structured summary of this paper.
Study Snapshot
ObjectiveStudy objective
MethodsResearch methodology
PopulationPopulation studied
Sample sizeSample sizes
OutcomesStudy outcomes here
ResultsStudy results comes here
LimitationsResearch study limitations comes here
A concise AI-generated summary of the paper will appear here once you click Generate AI Snapshot.
Abstract
Using the information asymmetries theory of underpricing, we investigate the role of innovation in the underpricing of initial public offerings (IPOs). We develop and test a model in which patents reduce information asymmetries in industries where the link between patents and inventive returns is transparent, thereby reducing underpricing. Conversely, patents reflect increased information asymmetries and underpricing in industries where the link is not transparent. We examine these relationships in a sample of 1,413 IPOs and find strong support for our hypotheses. In so doing, we make an important theoretical contribution by showing that the IPO market contextualizes firm information.
Keywords
Economics, Econometrics and FinanceBusiness, Management and Accounting
Journal of ManagementFirm Resources and Sustained Competitive Advantage
45,591 Citations1991Jay B. Barney
Advances in strategic managementFirm resources and sustained competitive advantage
38,481 Citations2004Jay B. Barney
The Journal of FinanceEfficient Capital Markets: A Review of Theory and Empirical Work
13,299 Citations1970Eugene F. Fama
Academy of Management JournalORGANIZATIONAL INNOVATION: A META-ANALYSIS OF EFFECTS OF DETERMINANTS AND MODERATORS.
6,409 Citations1991Fariborz Damanpour
Journal of Economic LiteraturePatent Statistics as Economic Indicators: A Survey
4,064 Citations1998Zvi Griliches
Academy of Management ReviewPRODUCT DEVELOPMENT: PAST RESEARCH, PRESENT FINDINGS, AND FUTURE DIRECTIONS
3,435 Citations1995Shona L. Brown, Kathleen M. Eisenhardt
The Journal of FinanceThe Long‐Run Performance of initial Public Offerings
3,430 Citations1991Jay R. Ritter
The Journal of FinanceVenture Capitalist Certification in Initial Public Offerings
2,404 Citations1991William L. Megginson, Kathleen A. Weiss
National Bureau of Economic ResearchProtecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)
1,854 Citations2000Wesley M. Cohen, Richard R. Nelson +1 more
The Journal of FinanceInformation Asymmetry, R&D, and Insider Gains
1,573 Citations2000David Aboody, Baruch Lev
The Journal of FinanceUnderwriter Reputation, Initial Returns, and the Long‐Run Performance of IPO Stocks
1,572 Citations1998Richard B. Carter, Frederick H. Dark +1 more
Financial ManagementWhy Has IPO Underpricing Changed Over Time
1,358 Citations2004Tim Loughran, Jay R. Ritter
Review of Financial StudiesWhy Don’t Issuers Get Upset About Leaving Money on the Table in IPOs?
1,353 Citations2002Tim Loughran, Jay R. Ritter
The Economic JournalImitation Costs and Patents: An Empirical Study
1,336 Citations1981Edwin Mansfield, Mark S. Schwartz +1 more
Journal of Financial EconomicsThe role of venture capital in the creation of public companies
1,226 Citations1990Christopher B. Barry, Chris J. Muscarella +2 more
The RAND Journal of EconomicsThe Importance of Patent Scope: An Empirical Analysis
1,184 Citations1994Joshua Lerner
Academy of Management JournalMEDIA LEGITIMATION EFFECTS IN THE MARKET FOR INITIAL PUBLIC OFFERINGS.
1,052 Citations2003Timothy G. Pollock, Viólina Rindova
Journal of Financial EconomicsVenture capitalists and the decision to go public
1,001 Citations1994Joshua Lerner
The Journal of FinanceThe Post‐Issue Operating Performance of IPO Firms
890 Citations1994Bharat A. Jain, Omesh Kini
Journal of Financial EconomicsOwnership and operating performance of companies that go public
763 Citations1997Wayne H. Mikkelson, M. Megan Partch +1 more
Academy of Management JournalNEW PRODUCT SEARCH OVER TIME: PAST IDEAS IN THEIR PRIME?
609 Citations2002Riitta Katila
Journal of Political EconomyOn Patents, R & D, and the Stock Market Rate of Return
575 Citations1985Ariel Pakes
Strategic Management JournalInformation asymmetry and investor valuation of IPOs: top management team legitimacy as a capital market signal
556 Citations2005Boyd Cohen, Thomas J. Dean
Journal of Financial and Quantitative AnalysisPartial Adjustment to Public Information and IPO Underpricing
520 Citations2002Daniel Bradley, Bradford D. Jordan
The Journal of FinanceTakeover Defenses of IPO Firms
519 Citations2002Laura Casares Field, Jonathan M. Karpoff
Journal of Financial and Quantitative AnalysisOn the Pricing of Unseasoned Equity Issues: 1965-1969
453 Citations1973Dennis E. Logue
Strategic Management JournalWealth and the effects of founder management among IPO‐stage new ventures
431 Citations2001S. Trevis Certo, Jeffrey G. Covin +2 more
Results based on data collected from 368 IPO-stage new ventures suggest that founder management has a positive impact on IPO underpricing, and that the founder management–underpricing relationship is moderated by (a) the IPO market share of the investment banker employed and (b) the proportion of insiders on the IPO firm's board of directors.
Review of Financial StudiesThe Role of Lockups in Initial Public Offerings
420 Citations2003Alon Brav, Paul A. Gompers
Organization ScienceOrganizational Capabilities in Product Development of Japanese Firms: A Conceptual Framework and Empirical Findings
393 Citations1998Ken Kusunoki, Ikujiro Nonaka +1 more
Academy of Management ReviewSqueezing Harder Doesn't Always Work: Continuing the Search for Consistency in Innovation Research
265 Citations1996C. Marlene Fiol
Academy of Management JournalNew Product Search Over Time: Past Ideas in Their Prime?
243 Citations2002Riitta Katila
Journal of Business Finance & AccountingR&D Intensity and Corporate Financial Policy: Some International Evidence
161 Citations2001Rahim Bah, Pascal Dumontier
Academy of Management JournalGIVING MONEY TO GET MONEY: HOW CEO STOCK OPTIONS AND CEO EQUITY ENHANCE IPO VALUATIONS.
157 Citations2003S. Trevis Certo, Catherine M. Daily +2 more
The Business History ReviewThe Competitive Performance of U.S. Industrial Enterprises since the Second World War
153 Citations1994Alfred D. Chandler
Strategic Management JournalThe recency of technological inputs and financial performance
88 Citations2008Michael B. Heeley, Robert Jacobson