Abstract
AbstractWe join research in entrepreneurship and corporate finance to investigate financial constraints on investments by IPO firms. The evidence indicates that IPO firms generally possess valuable growth opportunities, yet financial constraints also limit their ability to exploit them. Capital expenditures decline significantly post‐IPO, and information asymmetries between IPO firms and external capital providers help explain why some IPO firms are more financially constrained than others. Intangible assets that are often seen at the root of IPO firms' competitive advantages can also exacerbate external financing costs, constraining IPO firms' abilities to make future strategic investments. We also find that financial constraints are persistent, as they do not diminish as younger IPO firms mature. Copyright © 2009 Strategic Management Society.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
