Going Public and the Enrichment of a Supportive Network

Going Public and the Enrichment of a Supportive Network Past research on initial public offerings suggests that the reputation of a company positively affects the success of the offering. Success is usually measured in financial terms as if the essence of the operation lay only in the short-term inflow of money. In this paper, we investigate important albeit often neglected implications of going public by combining evidence from a series of preliminary case studies taken from the results of a survey of 57 Italian initial public offerings. Evidence from our research suggests that, besides providing an important inflow of capital, going public may actually improve the reputational and social capital of a company, by increasing its visibility, prestige and perceived trustworthiness. Therefore, going public may be an important way to support entrepreneurial activity, as it may expand and reinforce the network of relationships that offer access to external resources, complementary skills and investment opportunities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Going Public and the Enrichment of a Supportive Network

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Publisher
Springer Journals
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1023/A:1026119221991
Publisher site
See Article on Publisher Site

Abstract

Past research on initial public offerings suggests that the reputation of a company positively affects the success of the offering. Success is usually measured in financial terms as if the essence of the operation lay only in the short-term inflow of money. In this paper, we investigate important albeit often neglected implications of going public by combining evidence from a series of preliminary case studies taken from the results of a survey of 57 Italian initial public offerings. Evidence from our research suggests that, besides providing an important inflow of capital, going public may actually improve the reputational and social capital of a company, by increasing its visibility, prestige and perceived trustworthiness. Therefore, going public may be an important way to support entrepreneurial activity, as it may expand and reinforce the network of relationships that offer access to external resources, complementary skills and investment opportunities.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 11, 2004

References

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