Author
Özdemir, Özgür, Upneja, A.
Publication Date
2016
Publication Place
-
Elsevier
Subject
IPO, Internationalization, Service firms, Performance, Returns, Underpricing, Information asymmetry
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
0969-5931
Record ID
ef5e056a-bad1-459a-abf3-0f16243402b8
Library Location
Hotel Management
Date
2016
Notes
Due to copyright restrictions, the access to the full text of this article is only available via subscription.
Sample Text
This study examines the effect of internationalization on the initial and long-run IPO performance of service firms. The study discusses that pre-IPO internationalization of service firms contributes to the explanation of long-discussed IPO underpricing phenomenon, and underperformance of IPOs in the long-run. Sample of the study includes 1822 IPO issues conducted by US service firms between 1980 and 2009. Findings of the study suggest that international service firms leave less money on table in their IPOs compared to domestic service firms by providing significantly lower first day returns to their investors on their first day of public trading. Moreover, our findings provide evidence that 3-year cumulative abnormal returns and 3-year buy-and-hold returns of international service firms are significantly higher than domestic service firms, and international service firms outperform domestic service firms in both operating return on assets and operating cash flows in the post-IPO period. Lastly, the study documents that survival rate of service firms subsequent to an IPO issue increases with pre-IPO internationalization.
DOI
10.1016/j.ibusrev.2016.01.009
