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Intensity of Narrated Global Orientation on the Liabilities of Newness and Foreignness in Capital Markets: An Application of Hierarchical Topic Modeling

정혜민|남대일|이민선
한국전략경영학회 (Korean Strategic Management Society)|2022.08|전략경영연구 (Journal of Strategic Management)|제25권 제2호|pp. 1-29|DOI 10.17786/jsm.2022.25.2.001

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참고문헌

키워드

Initial Public OfferingLiability of Foreignness글로벌 지향성Liability of Newness외국인 비용Global OrientationHierarchical Topic Modeling해외 상장신생기업의 부담계층적 토픽 모델링
주제분류경영학

초록

Initial public offerings (IPOs) of early-stage companies in foreign markets may face two liabilities: the liabilities of newness and foreignness. The firms need to overcome the liabilities to achieve better performance at the IPOs. These liabilities can be strengthened or weakened by presenting the purpose of the companies’ listings on a foreign market in the official IPO prospectus. This study divides narrated global orientation into technology-driven and market-driven and investigates their moderating roles in the effects of those liabilities on IPO performance. From 2008 to 2014, we used data of 172 foreign IPOs in the U.S. stock market. From their IPO prospectuses, the parts describing the business were extracted and analyzed using the hierarchical topic modeling (hLDA) technique. Through the analysis, we recognized global orientation driven either by technology or market. As a result of regression analyses, we find that the effects of liabilities of newness and foreignness are mitigated when the intensity of the market-driven global orientation is high in the prospectus. This study has an implication that when firms decide to list on a foreign stock market, they need to be deliberate on how much they present either type of global orientation.

Abstract

Initial public offerings (IPOs) of early-stage companies in foreign markets may face two liabilities: the liabilities of newness and foreignness. The firms need to overcome the liabilities to achieve better performance at the IPOs. These liabilities can be strengthened or weakened by presenting the purpose of the companies’ listings on a foreign market in the official IPO prospectus. This study divides narrated global orientation into technology-driven and market-driven and investigates their moderating roles in the effects of those liabilities on IPO performance. From 2008 to 2014, we used data of 172 foreign IPOs in the U.S. stock market. From their IPO prospectuses, the parts describing the business were extracted and analyzed using the hierarchical topic modeling (hLDA) technique. Through the analysis, we recognized global orientation driven either by technology or market. As a result of regression analyses, we find that the effects of liabilities of newness and foreignness are mitigated when the intensity of the market-driven global orientation is high in the prospectus. This study has an implication that when firms decide to list on a foreign stock market, they need to be deliberate on how much they present either type of global orientation.

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