Examining Affective and Cognitive Discourse at the Time of IPO: Effects on Underpricing and the Moderating Role of Entrepreneurial Orientation

This study presents evidence concerning the effects of affective and cognitive rhetoric on the underpricing of firms at the time of their initial public offering. It is suggested that firms that use less affective, and more cognitively oriented discourse in their IPO prospectus will experience better underpricing outcomes. We examine these assertions using a sample of young high-tech IPO firms where investors rely on prospectuses as accurate and informative firm communications. Results from a robust five-year time span observe initial support for the hypothesized effects. Moreover, the signaling of a higher degree of entrepreneurial orientation in the firm prospectus is found to worsen the negative effects of affective discours

Organizational slack effects on innovation: the moderating roles of CEO tenure and compensation

This study draws on upper echelons theory, the resource based view, and Penrose's theory of firm growth to show that slack resources, specifically financial and human slack, are essential to the research and development (R&D) strategies of organizations. We also suggest that both Chief Executive Officer (CEO) tenure and CEO compensation positively moderate the slack-innovation relationship. The empirical design compromised of panel regression analysis. We tested our hypotheses using all US publicly traded firms between 1993 and 2011. The research results show that firms with excess financial resources are more likely to have higher R&D investments, and to completely understand this relationship we must study CEO tenure and compensation. This study sheds light on central antecedents of firm innovation, it further extends our understanding by investigating the impact of CEO tenure and compensation on the slackinnovation relationship, and it applies a longitudinal design which answers previous calls to investigate this topic in more depth by offering enhanced stability to the results while allowing for different economic scenarios

When do slack resources impact new venture success?

A significant body of research exists on organizational slack in large publicly traded firms. Little work exists on the value of slack resources for younger firms. Using a unique sample of high-tech, initial public offerings (IPOs), this dissertation examines how slack resources affect the short- and long-term success of these firms. Financial and non-financial data are collected from IPO prospectuses. I argue and test the relationship using partial hierarchical regression analysis that firms that possess financial, innovational, and managerial slack resources provide a signal to potential investors regarding the quality of the IPO. The results provide evidence that slack resources increase IPO value and percent premium paid. I also estimate the semiparametric Cox Proportional Hazards model to test whether slack resources significantly impact the probability of post-IPO survival. I find that the probability of post-IPO survival increases with pre-IPO working capital and R&D-investment slack. For practitioners, the most important implication is that certain types of slack resources are essential for the success of startup firms. Some key findings include: a strong financial position and sufficient managerial talent and expertise at the time of the IPO were found to be vital for achieving high valuation. While, for the long run, leading one s industry in investments in research and development (R&D) is essential to the survival of post-IPO firms. For research, the most important findings are IPO firm-specific slack resources may act as a signal of quality, different forms of slack resources (financial, innovational, and managerial) are vital to short- and long-term success, investors place considerable value on slack resources, and a deeper understanding of the behavior of slack resources in a unique setting

La Atalaya : diario de la mañana: Año XXIIII Número 8793 - 1916 enero 12

Copia digital. Madrid : Ministerio de Educación, Cultura y Deporte. Subdirección General de Coordinación Bibliotecaria, 201

Configurations of slack and their performance implications: An examination of high-tech IPOs.

Purpose – This study aims to improve the understanding of the relationship between organizational slack and firm performance for high technology initial public offerings (IPOs). Design/methodology/approach – Using cluster analysis the paper investigates configurations of slack and their associated performance implications. Findings – The findings indicate the existence of distinct configurations of slack resources and associated performance differences among the configurations. Implications of the findings for managerial practice and future research are discussed. Originality/value – The purpose of this study is to extend slack measurement research by examining the slack and performance relationship in high-technology IPOs from a configurational perspective