IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v41y2009i5p547-561.html
   My bibliography  Save this article

What determines the survival of internet IPOs?

Author

Listed:
  • Tjalling van der Goot
  • Noud van Giersbergen
  • Michiel Botman

Abstract

This article examines whether the variables that are significant in noninternet initial public offering (IPOs) play a similar role for internet IPOs. To this end, we analyse the determinants of survival of internet firms that have gone public at the NASDAQ stock exchange from December 1996 through February 2001. Financial and nonfinancial data published in the IPO prospectuses are examined. For our analysis, we use the semiparametric Cox proportional hazard model and estimate the effect of these variables on the trading (survival) time using the parametric Log-logistic survival model. It appears that the average operating history of internet IPOs is remarkably small compared to noninternet IPOs, namely 2.4 and 10 years, respectively. Furthermore, we find that the average number of risk factors for internet IPOs is four times higher than the number reported for noninternet IPOs. The results of the parametric analysis correspond to the semiparametric results. Our findings hold under a number of different model specifications and robustness checks. The sensitivity analysis in the Log-logistic model reveals that the greatest positive effect on the survival time comes from investor demand followed by operational cash flow over liabilities. The expected survival time is shortened mostly by IPO market level, followed by valuation uncertainty.

Suggested Citation

  • Tjalling van der Goot & Noud van Giersbergen & Michiel Botman, 2009. "What determines the survival of internet IPOs?," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 547-561.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:5:p:547-561
    DOI: 10.1080/00036840601007369
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840601007369
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sophie Pommet, 2011. "The survival of venture capital backed companies : an analysis of the French case," Working Papers halshs-00720927, HAL.
    2. Wagner, S. & Cockburn, I., 2010. "Patents and the survival of Internet-related IPOs," Research Policy, Elsevier, vol. 39(2), pages 214-228, March.
    3. Sophie Pommet, 2012. "The Survival of Venture Capital Backed Companies: An Analysis of the French Case," GREDEG Working Papers 2012-14, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. Aleksandar Bradic, 2012. "The Role of Social Feedback in Financing of Technology Ventures," Papers 1301.2196, arXiv.org.
    5. Cressy, Robert & Farag, Hisham, 2014. "Stairway to heaven or gateway to hell? A competing risks analysis of delistings from Hong Kong's Growth Enterprise Market," International Review of Financial Analysis, Elsevier, vol. 36(C), pages 195-205.
    6. Henson, James, 2014. "The Survival of Nonprofits in the United States," MPRA Paper 59494, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:41:y:2009:i:5:p:547-561. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.