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Multinationality and the performance of IPOs


  • Ram Mudambi
  • Susan M. Mudambi
  • Arif Khurshed
  • Marc Goergen


Does multinationality affect the Initial Public Offering (IPO) performance of entrepreneurial firms? Theoretical arguments can be made for a positive effect of multinationality as well as for a negative effect. We examine this question empirically by analysing IPO data for 240 UK firms. We find that multinationality has significant and positive effects on long-run IPO performance. This suggests that the market perceives entrepreneurial firms with multinational activities as possessing unique intangible assets that are indicative of future financial success. Factors affecting the IPO performance also differ systematically between firms with multinational operations and those without multinational operations. Stocks of intangible assets and the quality of the network significantly affect the performance of entrepreneurial IPO firms that ‘go global’. In contrast, domestic IPO firm performance is affected by offer size and underwriters’ perception of firm quality. The findings have important implications for entrepreneurial firms who are making decisions on ‘going global’ and ‘going public’.

Suggested Citation

  • Ram Mudambi & Susan M. Mudambi & Arif Khurshed & Marc Goergen, 2012. "Multinationality and the performance of IPOs," Applied Financial Economics, Taylor & Francis Journals, vol. 22(10), pages 763-776, May.
  • Handle: RePEc:taf:apfiec:v:22:y:2012:i:10:p:763-776
    DOI: 10.1080/09603107.2011.626396

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    References listed on IDEAS

    1. Casson, Mark, 1995. "Enterprise and Competitiveness: A Systems View of International Business," OUP Catalogue, Oxford University Press, number 9780198289579.
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