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This paper proposes the effect of celebrity and infamy on the initial public offering (IPO) investors’ attention and evaluation in the high-tech industry which has high uncertainty and information asymmetry between firms and investors. This research also examines firm-initiated positive information as a moderator. To measure the celebrity and infamy, we use 115 IPO firms in the high-tech industry from 2012 to 2019. With firm data, we detected the positive and negative attention toward firms based on 5,251,587 tweets from one year before the IPO using sentiment analysis. This study may provide contributions to discovering how emotional attention from public audiences and firm-initiated information disclosure influence on a firm in an IPO context and to proposing social media as a measure of celebrity and infamy.
Beyond the Largest: How the Second Largest Shareholder Affects Newly Public Firms' Growth Actions?
Leven J. Zheng,
Xi'an Jiaotong-Liverpool University Tao Bai,
University of Queensland
We propose a principals-principals approach in the context of the largest and second largest shareholder to understand the monitoring mechanisms of the second largest shareholder of newly public firms. Although previous literature has strongly assumed the monitoring mechanisms (either encouraging or constraining) of the second largest shareholders, they have not directly tested these two assumption mechanisms. Based on principals-principals perspective, we argue that the monitoring mechanisms (either encouraging or constraining) of the second largest shareholder are largely dependent on the types of firm growth actions of newly public firms. Finally, we show that the second largest shareholders positively moderate the relationship between largest (controlling) shareholders and firm organic growth actions. While, we find that the second largest shareholders negatively moderate the relationship.
Which Is More Valuable for Non-Professional Crowdfunding Investors: Entrepreneurial Saying or Doing?
Renmin University of China Eryue Huang,
Renmin University of China
While there is growing scholarly interest in crowdfunding financing, most of this literature assumes that non-professional investors are “dumb” or does not consider the difference between professional and non-professional investors in decision-making. Drawing upon entrepreneurial financing and crowdfunding literature, we explicate that non-professional investors face a dilemma due to the uniqueness of online-only mode of crowdfunding. Non-professional investors, on the one hand, intend to value actions higher than words, but, on the other hand, do not have capability to distinguish the authenticity. Based on a sample of 36,656 technology projects collected from Kickstarter before 2019, we find strong evidence for all our predictions. Our findings highlight the dual sides of non-professional investors, and have important implications for entrepreneurs, non-professional investors, and platforms.
New Venture Formalization and Resource Acquisition: Evidence from Funding Outcomes
George Mason University Suho Han,
Prior research examining organizational structure in the context of new ventures focuses largely on the internal implications and outcomes of structure. In this study, we explore the possibility that the organizational structure of new ventures, namely its degree of formalization, has external implications by examining its influences on ventures' ability to acquire financial resources from key external providers, such as investors. More specifically, we argue that the level of formalization serves as a salient cue to investors that conveys the internal efficiencies regarding the use of resources of a new venture that in turn, increases the likelihood of funding. Our empirical analyses using detailed longitudinal data of 4,928 randomly sampled U.S. new ventures from the Kauffman Firm survey strongly support our arguments.