Social Capital of Young Technology Firms and Their IPO Values: The Complementary Role of Relevant Absorptive Capacity

Xiong, Guiyang; Bharadwaj, Sundar G.

doi:10.1509/jm.09.0202

Cited by 93 publications

(68 citation statements)

References 97 publications

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“…Strategic Alliances. In line with extant literature, we anticipate that firms enter into various alliances to access external resources (Xiong and Bharadwaj 2011). We analyze the IPO prospectuses to count the total number of alliances in which each firm engages.…”

Section: Measuring Earnings Surprise and Abnormalmentioning

confidence: 91%

“…The firm's internal strategic emphasis on value creation or value appropriation also represents information that is valuable to investors. Because details about these external and internal factors help reduce uncertainty about the firms' inherent "worthiness" Yan 2009, Xiong andBharadwaj 2011), IPO firms likely share this information during the IPO process, and the information in turn can influence managerial actions, including myopic actions. We accordingly consider strategic alliances, key customer relationships, and the internal strategic emphasis as critical moderators.…”

Section: Moderating Variablesmentioning

confidence: 99%

“…We analyze the IPO prospectuses to count the total number of alliances in which each firm engages. indicate whether a firm has key customer relationships (Xiong andBharadwaj 2011, Yli-Renko et al 2001).…”

Section: Measuring Earnings Surprise and Abnormalmentioning

confidence: 99%

“…Sources of external resources Number of alliances (new product and marketing), provided in the IPO prospectus Xiong and Bharadwaj (2011) Key customer relationships Sources of external resources "Major customers" that account for more than 10% of the firm's revenues, provided in the IPO prospectus; we include a dummy variable to indicate whether the firm has key customer relationships Xiong and Bharadwaj (2011) Leland and Pyle (1977) Price adjustment Upward or downward revisions in offer price relative to the file price range…”

Section: Strategic Alliancesmentioning

confidence: 99%

“…Because IPO firms by definition have limited track records, they create significant uncertainties, which IPO firms can address by providing more information about their resources and internal strategies Yan 2009, Xiong andBharadwaj 2011). For example, an IPO firm can access external resources if it possesses interfirm relationships that allow it to integrate its strategies and processes with those of partners (e.g., Uzzi 1997), such as strategic alliances or key customer relationships.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Organizational Debut on the Public Stage: Marketing Myopia and Initial Public Offerings

Saboo

Chakravarty²,

Grewal

2016

Marketing Science

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S uccessful initial public offerings (IPOs) provide firms with access to valuable resources, but also put pressure on firms to impress potential investors with evidence of their current well-being and prospects for future growth. To impress investors IPO firms might curtail their marketing budgets, which appears to inflate current earnings and provide evidence of current well-being. However, curtailing marketing budgets unexpectedly during an IPO may be a myopic practice, in that the immediate benefits of these budget cuts are offset by their longer-term adverse consequences on financial well-being. The extent of these adverse consequences in turn may be moderated by external firm factors, including strategic alliances and key customer relationships, and internal firm factors, such as the strategic emphasis on value creation versus value appropriation. A sample of 1,095 IPOs during 2000-2011 reveals evidence of myopic marketing practices in more than 37% of the sample. Investors seem misled during IPOs, but they correct their beliefs in the three years following the IPO and penalize these firms. The penalty for myopic marketing budgeting practices also increases with more strategic alliances and a strategic emphasis on value creation versus value appropriation, but it decreases in the presence (versus absence) of key customer relationships.Data, as supplemental material, are available at http://dx.

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Section: Measuring Earnings Surprise and Abnormalmentioning

confidence: 91%

Section: Moderating Variablesmentioning

confidence: 99%

Section: Measuring Earnings Surprise and Abnormalmentioning

confidence: 99%

Section: Strategic Alliancesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Organizational Debut on the Public Stage: Marketing Myopia and Initial Public Offerings

Saboo

Chakravarty²,

Grewal

2016

Marketing Science

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Asset-Based Strategies for Capturing Value in the Service Economy

Wirtz

Ehret

2018

Handbook of Service Science, Volume II

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In advanced service economies, almost any activity, skill, and asset can be bought on competitive markets, making it increasingly difficult to build competitive advantage on any of those inputs. Therefore, firms have to carefully decide what to own in order to capture value. That is, firms have to explore what types of assets can add value to their customers and at the same time are difficult or illegal to copy by competition. We examined this question and identified asset categories that potentially allow a firm to appropriate value. They are (1) resource-based assets (e.g., proprietary equipment and systems, manufacturing-related intellectual property (IP), and social capital with employees); (2) platform-based assets (e.g., physical and intellectual platform assets, and critical mass and volume-based advantages,); and (3) market-based assets (e.g., brands and related brand equity, physical and virtual points-of-sale, access to physical and virtual distribution networks, and customer information and loyalty programs). Furthermore, we propose that each of these three asset categories can take the form of three types of capital. They are (1) tangible capital (i.e., it has a physical manifestation such as equipment and physical points-of-sale); (2) intangible capital (i.e., it can be codified and legally protected such as patents and brands); and (3) social capital (i.e., it is embedded in people's minds and cannot be legally protected such as trust, goodwill and engagement of employees, partners and customers). The three asset types and their three manifestations are integrated into a framework for an asset typology. For example, market-based assets can come in all three forms, that is in tangible (e.g., point-of-sale networks), intangible (e.g., brands), and social (e.g., customer equity) form. Finally, we identified four important organizational capabilities of asset integration that are independent of asset ownership but effectively link owned and outsources assets, capabilities, and processes to value creation and can also allow a firm to capture value. They are (1) business models for designing the architecture and "Gestalt" of value creation; (2) a customer-centric culture and a climate for service; (3) innovation capabilities, and (4) the effective management of an integrated web of processes and activities. We discuss the why and how of this asset typology and its implications for management, strategy, and research.

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Empirical Research on the Influence Factors of Knowledge Absorptive Capacity of High-Tech SME

Yang

Zheng²,

Peng³

2013

The 19th International Conference on Industrial Engineering and Engineering Management

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Social Capital of Young Technology Firms and Their IPO Values: The Complementary Role of Relevant Absorptive Capacity

Cited by 93 publications

References 97 publications

Organizational Debut on the Public Stage: Marketing Myopia and Initial Public Offerings

Organizational Debut on the Public Stage: Marketing Myopia and Initial Public Offerings

Asset-Based Strategies for Capturing Value in the Service Economy

Empirical Research on the Influence Factors of Knowledge Absorptive Capacity of High-Tech SME

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