IPO peer effects

Aghamolla, Cyrus; Thakor, Richard T.

doi:10.1016/j.jfineco.2021.05.055

Cited by 60 publications

(23 citation statements)

References 62 publications

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“…Moreover, this industry is unique for being research and development (R&D)-intensive and highly competitive (Thakor & Lo, 2022). The first successful firms in this industry can bring patent and marketing exclusivity benefits (Aghamolla & Thakor, 2022), leading to meaningless disclosure by other firms. There is still too little research on proprietary information disclosures in the broader industry.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…One of the reasons few studies focus on proprietary information disclosure is the difficulty of obtaining appropriate data. Previous studies used clinical trial disclosures by pharmaceutical firms to study proprietary information (Aghamolla & Thakor, 2022; Capkun et al, 2021). However, such studies are limited to the pharmaceutical industry.…”

Section: Introductionmentioning

confidence: 99%

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Peer effect of proprietary information: A cost–benefit analysis of customer information disclosure

2023

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This study examines how industry peer firms' information disclosures affect firms' customer disclosure. Using samples of Chinese A‐share companies from 2007 to 2019, our results show the following: first, the peer firms' customer disclosures have a positive and significant effect on firms' customer disclosures. The results remain robust after the instrumental variable alleviates the endogeneity problem. Second, firms refer to peer firms' disclosure decisions only when it is difficult to weigh the disclosure benefits and costs. Third, firms tend to imitate the disclosure decisions of industry leaders. The cost–benefit hypothesis of proprietary information disclosure proposed in this study contributes to the literature.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Peer effect of proprietary information: A cost–benefit analysis of customer information disclosure

2023

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“…The IPO speed for high-tech start-ups An IPO is both a performance milestone for a start-up that represents public approval and a financial success for VC investors (Aghamolla and Thakor, 2022;Ragozzino and Blevins, 2016). Our study focuses on the IPO speed of high-tech start-ups as it reflects public investor concerns.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

The technological novelty of invention and speed to IPO of high-tech start-ups

2022

International Small Business Journal: Researching Entrepreneurs

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The technological novelty of inventions signals economic potential while simultaneously indicating considerable technological and market risks. We speculate that unlike early-stage venture capital (VC) investors, late-stage public investors will interpret technological novelty as a signal of high risks. Consequently, they will hesitate to promptly invest in high-tech start-ups with such inventions, thereby slowing the initial public offering speed of the start-ups. Based on a sample of 408 VC-backed healthcare start-ups founded between 1990 and 2010, we find support for our hypothesis. We also find that the negative effect of technological novelty of inventions can be relieved when the technology is characterised by conventionality, when the founder is also the inventor, or when the start-up is backed by premium VC investors.

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“…Table 3 examines the effect of equity market downturns on drug suspension probability in private firms. On one hand, market downturns may lead to a drying up of VC funding, or alternatively Aghamolla and Thakor (2021) document that private firms are more likely to perform an IPO to compete against a competitor that has recently gone public. Market downturns may increase drug suspensions by inhibiting the propensity of firms to go public (Bernstein (2015)) and effectively compete against a competitor.…”

Section: Figurementioning

confidence: 99%

“…1 I also investigate the effect of equity market shocks on private firms. On one hand, market downturns may inhibit innovation by deterring a private firm from going public via an initial public offering to effectively competing against a competitor (Aghamolla and Thakor (2021)). Similarly, market downturns may also lead to a drying up of venture capital funding.…”

Section: Introductionmentioning

confidence: 99%

The Real Effects of Equity Markets on Innovation

Mace

2022

J. Financ. Quant. Anal.

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In theory, financial markets promote innovation by selectively allocating capital to high-quality projects. In this article, I show that equity markets can also inhibit innovation. In public firms, I find that short-term equity market declines cause pharmaceutical companies to abandon early-stage drug developments, irrespective of drug quality or changes in a firm’s stock price. I show that financing constraints drive this behavior, highlighting that even short-term market fluctuations can have long-term effects on pharmaceutical innovation and prevent potentially life-saving drugs from progressing to the market.

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IPO peer effects

Cited by 60 publications

References 62 publications

Peer effect of proprietary information: A cost–benefit analysis of customer information disclosure

Peer effect of proprietary information: A cost–benefit analysis of customer information disclosure

The technological novelty of invention and speed to IPO of high-tech start-ups

The Real Effects of Equity Markets on Innovation

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