Document Type
Article
Publication Date
9-2015
Publication Title
Journal of Banking & Finance
Volume
58
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 1981–2012, we find that firms with exports and/or foreign sales prior to going public have significantly lower underpricing than firms without international business activity. Furthermore, firms with international business activity significantly outperform purely domestic IPO firms over 3- and 5-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.
First Page
436
Last Page
456
DOI
10.1016/j.jbankfin.2015.05.015
ISSN
0378-4266
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Recommended Citation
David C. Mauer, Song Wang, Xiao Wang, et al.. "Global Diversification and IPO Returns" (2015). Economics & Finance Faculty Publications. 15.
https://commons.und.edu/ef-fac/15