The Narrated Global Orientation and the Liabilities of Newness and Foreignness

Abstract

This research builds upon the liabilities that firms undergo during foreign initial public offerings (IPOs). While many studies have explored global orientation in internationalization, not much research has focused on the IPO context and the effect upon the liabilities of newness and foreignness. Using a sample from 2008 to 2014 of foreign IPO firms in the United States (US), our study finds evidence about the impact of the narrated global orientation. To detect how a firm narratively focuses on which dimensions of global orientation, we use hierarchical topic modeling and propose a global orientation narrative strategy of a firm using the modeling. The results show that the narrated market-driven and technology-driven global orientation in an IPO process have moderating effects on the relationship between the liabilities of newness and foreignness and IPO performance.