The Impact Of Internationalization on the IPO Performance Of Service Firms: Examination of Initial Returns, Long-Run Performance and Survivability
Open Access
- Author:
- Ozdemir, Ozgur
- Graduate Program:
- Hotel, Restaurant, and Institutional Management
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- July 11, 2012
- Committee Members:
- Arun Upneja, Dissertation Advisor/Co-Advisor
Arun Upneja, Committee Chair/Co-Chair
Amit Sharma, Committee Member
Anna S Mattila, Committee Member
Karl A Muller Iii, Committee Member
James Landis Rosenberger, Committee Member - Keywords:
- IPO
Underpricing
Internationalization
Performance - Abstract:
- This dissertation examines the role of internationalization on the IPO performance service companies particularly scrutinizing initial returns, long-term return and operating performance and post-IPO survivability. The dissertation hypothesizes that internationalization may help reduce uncertainty about issuing firms by creating additional source of trust and credibility; improve long-term return and operating performance of international companies versus domestic companies; and lastly increase the survival rate in the aftermarket with significant advantages brought by internationalization. Possible negative effects of the internationalization are also discussed on the performance indicators. Several data sources are used to test the hypotheses. SDC new issue database, Compustat and CRSP annual files, and IPO prospectuses are the major data sources. The sample includes 1,822 IPO issues from 1980 to 2010. Evidence presented in this dissertation is consistent with the findings of previous studies that found positive effects of internationalization on the traditional performance measures. Specifically, the dissertation reveals that international service firms leave less money on the table in their initial public offerings. In other words, international firms experience lower underpricing in their first public days. Furthermore, international service firms are found to perform better in the long-run both in return performance and operating performance compared to domestic firms. Additionally, international service firms are shown to survive longer in post-IPO life.