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The impact of industry IPOs on acquisitions of new ventures : an information spillovers perspective
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Wu, C-W. and Reuer , Jeffrey (2021) The impact of industry IPOs on acquisitions of new ventures : an information spillovers perspective. Long Range Planning, 54 (1). 101945. doi:10.1016/j.lrp.2019.101945 ISSN 0024-6301.
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Official URL: https://doi.org/10.1016/j.lrp.2019.101945
Abstract
The announcements of initial public offerings (IPOs) in an industry can convey to potential acquirers information about the growth prospects of the rivals of ventures undertaking IPOs, thereby increasing their likelihood of being acquired. We investigate several information diffusion mechanisms to examine how information conveyed by industry IPOs shape such acquisitions. We also develop a contingency perspective on how the value of such information spillovers will vary across acquirers. Our empirical evidence indicates that information in the IPO market channeled via media coverage, analyst coverage, and IPO underpricing raises an acquirer’s likelihood of acquiring a private venture. Thus, the information intermediated as a consequence of IPOs relaxes the constraints of an acquirer’s information environment, and this is particularly the case for diversifying acquirers.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Going public (Securities), Consolidation and merger of corporations, Knowledge management | ||||||||
Journal or Publication Title: | Long Range Planning | ||||||||
Publisher: | Elsevier | ||||||||
ISSN: | 0024-6301 | ||||||||
Official Date: | February 2021 | ||||||||
Dates: |
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Volume: | 54 | ||||||||
Number: | 1 | ||||||||
Article Number: | 101945 | ||||||||
DOI: | 10.1016/j.lrp.2019.101945 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 17 December 2019 | ||||||||
Date of first compliant Open Access: | 16 December 2021 | ||||||||
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