The Aftermarket Performance of Initial Public Offerings: The Brazilian Experience

ABSTRACT

This article analyzes the behavior of share prices in the first aftermarket year at the moment the company goes public for the first time, specifically in the case of Brazil. First, we present evidence drawn from the international capital markets and how returns may be characterized. Next, we analyze current Brazilian capital markets and returns on shares for 30 companies that went public in the country between January 2004 and July 2006. We found that Brazilian initial public offerings averaged large positive returns both in the short-term and for a one-year period.

RESUMEN. Este trabajo busca evidenciar cómo el precio de las acciones en IPOs tiende a comportarse en el mercado secundario durante el primero año de negociaciones, específicamente en el caso brasileño. En primer lugar, se presentan las evidencias en el mercado internacional de capitales y mostramos que tipo de retornos se suele obtener. Luego, se lleva a cabo un análisis del mercado de capitales brasileño y de la rentabilidad en 30 IPOs, ocurridos entre enero de 2004 y julio de 2006 en el país. Se nota que el desempeño de IPOs en Brasil tiene fuertes tendencias positivas, tanto para el corto plazo como para un año.

RESUMEO. Este estudo analisa o comportamento dos preços de ações no primeiro ano após a abertura de capital de uma empresa, especificamente no caso do Brasil. Primeiramente, apresentamos dados do mercado de capitais internacionais e como os retornos tendem a ser. Depois disto, analisamos o mercado de capitais brasileiro e os retornos das ações de 30 empresas que abriram o capital no país entre janeiro de 2004 e julho de 2006. Constatamos que os lançamentos de ações (IPOs) brasileiros proporcionaram, em média, retornos positivos grandes a curto prazo e também por um período de um ano.     

Managing cross-border knowledge transfer for innovation: An introduction to the special issue

This introduction to the special issue maps the extant research on managing crossborder knowledge for innovation and classifies it into four clusters: knowledge spillovers and location, international alliances and R&D networks, knowledge transfer and absorptive capacity, and learning organization and capabilities. The eleven articles that compose the special issue are introduced, and a future agenda for international business research is proposed.     

Structuring deals and governance after the IPO: Entrepreneurs and venture capitalists in high tech start-ups

In an effort to better understand the effects of venture capital investment on selected firm governance and financing structures, we examined the post-IPO experiences of 190 biotechnology and healthcare firms (see appendix). Our study revealed that in virtually all cases, the involvement of venture capitalists reduced the role of the founder-entrepreneur in strategic decision making. This was illustrated by the larger proportion of outside directors when venture capitalists invested and the smaller proportion of entrepreneurs who remained officers or in board positions after the IPO. We also found that venture capitalists rarely invested alone, and preferred to structure deals in which venture capital partners share both risks and rewards.     

Fortune at the bottom of the innovation pyramid: The strategic logic of incremental innovations

It is not uncommon to come across appeals in business literature exhorting managers to devote greater effort to the pursuit of radical innovations, or to see comments admonishing managers for devoting too much energy to the search for incremental innovations. Over the years, successful radical innovations have undisputedly had a significant impact on the fortunes of a number of companies. At the same time, firms cannot afford to overlook the role of incremental innovations in enhancing and sustaining the revenue and profit streams of successful radical innovations. From the standpoint of survival, growth, and profitability, both home runs, meaning radical innovations, and singles, meaning incremental innovations, matter. The fact that home runs are generally infrequent underscores the importance of frequent singles. This article explores the various competitive strategy contexts in which incremental innovations can be leveraged effectively against that backdrop.     

The impact of different kinds of knowledge for the internationalization process of Born Globals in the biotech business

This study explores how different kinds of knowledge of founders and managers at Born Globals are related to the firms’ discovery and exploitation of foreign market opportunities. Based on data from eight biotech Born Globals, we dichotomized Born Globals into two subsets: Born Industrials and Born Academics. The study shows that the founders’ and managers’ different combinations of technological and international knowledge impact the firms’ proactive or reactive behavior in discovering foreign market opportunities. The results indicate that different kinds of Born Globals follow different internationalization processes and that Born Globals, therefore, should not be analyzed as a homogenous group, which has been the common perspective in previous research.     

Different determinants at different times: B2B adoption of a radical innovation

This research aims to empirically determine which factors best explain business to business adoption of a radical, high-tech innovation early in the diffusion process. Early lifecycle data collection provides insights about the differences in determinants of adoption at different times in the product diffusion process. The results indicate that differences do exist between the determinants of early adoption, intent to adopt later, and unawareness of the innovation. The influencers of earliest adopters appear to be innovation-focused: the perceived benefits of the innovation as well as the strength of the producer network positively relate to early adoption; early adopters also tend to perceive the technology in the innovation as less different than previous technology than do those who intend to adopt later. The influence of a champion within the adopting firm, the ability of the firm to sense and respond to new technology, and the depth of technology knowledge within the adopting firm are significant influencers across multiple stages of diffusion, showing that firm-internal traits are particularly important influencers of adoption. Laggard firms are missing the critical firm traits that lead to information gathering and understanding of innovations. In addition to contributing to adoption research theory and methodology, this research has implications for innovation-marketing and innovation-adopting firms.     

R&D innovation and the value of cash in the biotech industry

This study investigates how the market pricing of an additional dollar of cash held by biotech firms is conditional upon the industry's typical performance, R&D innovation. Under the proposed R&D innovation regime, I find i) an additional dollar of cash is priced higher if held by a firm with higher R&D innovation; ii) the role of R&D innovation is asymmetric depending on whether R&D activities move the drug discovery and development forward or backward; and iii) R&D innovation also differentiates the association between investment opportunities and value of cash observed by prior studies.     

Foreign Investment in Brazilian Public Offerings: The Role of Board Composition

Recently, foreigners have been responsible for negotiating more than half of the shares issued by the companies listed in the Brazilian Stock Market. In order to understand the characteristics of companies that influence the increase of international financing, the aim of this article was to investigate the relation between foreign investment in public offerings and board composition. We examine data of 183 Brazilian IPOs and subsequent offerings from 2004–2016 using OLS regression. The empirical result suggested that companies that have a foreign director as a board member and are in a special listing segment of B3—bound by rules of corporate governance—tend to attract more foreign investment. This means that foreigners are sensitive to good corporate governance practices when financing Brazilian firms’ IPOs or that issue new shares. Our findings imply that improvements in the corporate governance practice of companies could increase their ability to raise foreign capital.

RESUMERecientemente, más de la mitad de las acciones emitidas por las empresas cotizadas en la Bolsa de Valores brasileña fueron negociadas por extranjeros. El objeto de este estudio consistió en investigar la relación existente entre las inversiones extranjeras en las ofertas públicas y la composición de sus juntas directivas, para entender las características de las empresas que contribuyen a aumentar el financiamiento internacional. Utilizando la regresión de mínimos cuadrados ordinarios dinámicos (MCOD, OLS en inglés), examinamos datos de la Oferta Pública Inicial Brasileña 183 (IPO) así como ofertas subsiguientes del período 2004-2016. El resultado empírico obtenido sugiere que las empresas cuya junta directiva tiene como miembro un director extranjero y constan en un segmento de cotización especial (B3), sujeto a normas de gobernanza corporativa, suelen atraer más inversiones extranjeras. Esto implica que, al financiarlas, los extranjeros son más susceptibles a que las empresas brasileñas que abren su capital o emiten nuevas acciones, usen buenas prácticas de gobernanza corporativa. Nuestros hallazgos sugieren que la implementación de mejoras en las prácticas de gobernanza corporativa de las empresas puede aumentar su financiamiento internacional.

RESUMORecentemente os estrangeiros passaram a ser responsáveis pela negociação de mais da metade das ações emitidas pelas empresas listadas na Bolsa de Valores brasileira. Para entender as características das empresas que influenciam o aumento do financiamento internacional, o presente trabalho tem como objetivo o estudo da relação entre o investimento estrangeiro nas ofertas públicas e a composição das diretorias. Examinamos dados de 183 IPOs (Oferta Pública Inicial) e de ofertas subsequentes, de 2004 a 2016, usando a regressão MQO (OLS na sigla em inglês). O resultado empírico sugere que as empresas que têm um diretor estrangeiro na diretoria e que estão no segmento de listagem especial da B3—sujeitas às normas de governança corporativa—tendem a atrair mais investimentos. Isso significa que os estrangeiros estão alerta quanto às boas práticas de governança ao considerar empresas brasileiras que abrem o capital ou que emitem ações novas. Os nossos achados sugerem que melhorias nas práticas de governança corporativa das empresas podem elevar o financiamento internacional das empresas.     

The metrics of knowledge: Mechanisms for preserving the value of managerial knowledge

In recent years there has been a dramatic increase in the scholarly study, and actual implementation in work organizations, of knowledge systems. While much of this effort has been directed toward making these systems more efficient, a gap has developed between the need to preserve and safeguard managerial knowledge, and the continued hemorrhaging of the same from the pool of organizational knowledge. This article describes that gap and suggests a set of mechanisms (socialization, tutoring, mentoring, and continuous reporting) which may be used to reduce the loss of critical knowledge. Because knowledge is fundamentally a cognitive phenomenon, these mechanisms emphasize the sharing of knowledge by experienced, with less experienced, managers. This article also recommends that these largely informal mechanisms be absorbed by the organization to become an integral component of the formal modes of knowledge management, in particular the institutional knowledge system.     

Accessing capital markets: Aristocrats and new share issues in the British bicycle boom of the 1890s

The article reconsiders the mid-1890s boom in which a large number of firms in the bicycle, pneumatic tyre and related industries were floated. It investigates why so many of these issues featured aristocratic directors in their prospectuses and finds that they represented social connections that were a necessary condition for regional industrial firms to gain a London listing. The case shows that the role and value of these directors was to access capital markets and financial resources, as opposed to a temporary aberration designed to inflate share prices and mislead investors.     

Stuck at the bottom: Role of tacit and explicit knowledge on innovation of developing-country suppliers in global value chains

We take a social exchange theoretical perspective of innovation to develop and test a model of the intervening role of tacit and explicit knowledge exchange in explaining innovation of developing-country suppliers in non-equity-based global value chains (NEGVCs). Results of structural equation modelling for a sample of Bangladeshi suppliers embedded in apparel NEGVCs show that tacit and explicit knowledge fully mediate the associations between network competence and both low value-added and high value-added innovation contingent on the quality of network relationships. We also found that both tacit and explicit knowledge contribute more to low value-added innovation than to high value-added innovation. The managerial and policy implications of our findings as to why developing-country suppliers in NEGVCs are stuck in low value-added activities are fully discussed.     

The influence of innovation orientation in human resource management on new product development: The moderating role of innovation type

Despite substantial prior research on new product success, there are still high failure rates. Why might this be the case? This paper argues that (1) the most important determinants of new product success involve managerial behavior and therefore a need exists to examine the influence of innovation orientation of human resource management (IO-HRM) on these determinants, and (2) these relationships are moderated by the type of innovation, product versus service. Data from 275 product innovation projects suggest that IO-HRM is a significant predictor of not only new product success but also its prime determinants: the proficiency of development activities, product advantage, marketing synergy, and top management support. Further, the linkage between IO-HRM and new product success and marketing synergy is found to be stronger in service than in product innovation projects.     

Improving marketing success: The role of tacit knowledge exchange between sales and marketing

Successful organizations adapt their marketing strategies to marketplace changes. Boundary spanners, such as salespeople, because they are able to embed themselves in social networks outside the organization, play a key role in developing marketplace knowledge. However, if this knowledge remains solely with the boundary spanners, it cannot be used effectively to improve firm performance. This study investigates tacit knowledge exchange between sales and marketing and its ability to enhance marketing success (i.e., marketing program innovativeness, relative efficiency, and relative effectiveness). In addition, by examining five antecedents hypothesized to influence tacit knowledge exchange, it provides guidance to sales and marketing managers, who desire to improve tacit knowledge exchange, and, in turn, marketing success.     

Determinants of innovation performance in Spanish hospitality companies: analysis of the coexistence of innovation strategies

The present study attempts to determine the influence of different sources of technological knowledge on the innovation performance of hospitality companies in Spain (Europe) and analyze the degree of coexistence between innovation strategies in the companies. The paper considers a number of ways of incorporating technology and evaluates the impact of different innovation strategies on innovative performance in hospitality companies, in order to assess the importance of each in the Spanish hospitality industry. Employing data from the 2000 Survey on Technological Innovation, two databases were built with information on the Spanish hospitality industry. The first includes all hospitality companies and the second only companies engaged in innovation activities. With the second database, an analysis of the coexistence of innovation strategies is done by means of seven logit regressions. The results show that the innovation strategies that coexist most frequently are, first, the acquisition of external technology services and research and development cooperation, and second, the acquisition of machinery and non-material technologies. Additionally, the influence of different innovation strategies on companies' innovation performance is analyzed by means of a two-step logit model applied to both databases. The findings suggest that only the acquisition of machinery has a statistically significant impact on innovation performance. However, contrary to expectations, the influence appears to be negative.     

The search for skills: Knowledge stars and innovation in the hiring process

The effective utilization of knowledge has become an important part of how firms gain competitive advantage in the marketplace. However, the recruitment, search, and selection processes used to obtain workers who would develop and deploy that knowledge have not materially changed for many years, with human resources (HR) frequently automating legacy procedures. We believe that the hiring processes for exceptional knowledge workers, whom we call knowledge stars, must adapt to the current business environment. Using the framework of architectural innovation, we propose that HR’s recruitment of knowledge stars should begin before specific jobs are announced, should be done in partnership with line managers, and should be done in coordination with implementation of other workplace innovations such as the development of communities of practice and participative management. We conclude by discussing how changes in the search processes for knowledge stars fit in context with some other ongoing challenges for HR personnel.     

The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation

This study theoretically and empirically analyzes the mediating role of innovation on the relation between collaboration and internationalization strategies in knowledge-intensive business services (KIBS). The work also considers the impact of foreign-based partners and examines the potential direct and indirect effects via innovation of cross-border collaboration on the internationalization of KIBS. The empirical analysis uses a wide sample of Spanish KIBS for the period 2003–2005. The study finds that collaboration positively affects the internationalization of KIBS via innovation. The results related to cross-border collaboration indicate the existence of direct and indirect effects via innovation on internationalization.     

The impact of knowledge management on innovation and entrepreneurship in the biotechnology and telecommunications industries

In the resource-based view approach, the knowledge frontier rests on the understanding of the process of creating and recreating distinctive competences. Moreover, in spite of the importance of knowledge assets, how innovation distinctive competences are generated in organizations is still an unknown factor. This research studies the effect of introducing knowledge management programs in the development of innovation distinctive competences, using two knowledge intensive industries. We establish a conceptual delimitation of knowledge management as a directive system through a set of principles and practices. The theoretical relationships we propose are tested in an empirical study carried out in 222 firms from the Spanish biotechnology and telecommunications industries.      

浅谈知识经济时代图书馆的发展方向

本文论述了知识经济时代图书馆面临的挑战,介绍了网络化发展对图书馆馆藏信息资源、图书情报组织将、人力资源结构将产生的变化.     

Customer interaction in environmental innovation: the case of cloth diaper laundering

The aim of this paper is to illustrate the capability of a customer of a service business to act as a co-manufacturer. Thus, the customer becomes a key element in simultaneously improving environmental performance and competitiveness, in both the environmental dimension as well as in other dimensions. To this end, we have analyzed the case of the Dydee Company. In order to address the root of the environmental issues, certain procedures were used to change the customers’ habits. This option turned out to be much more efficient and less risky than its alternatives. The challenge laid in getting the customers, once informed, to be willing to modify such a personal and delicate task. The exchange rate at the time of writing this case analysis (9 September 1999) was 166 pesetas to the dollar, that is, approximately the current value of 1 euro.     

产业组织中B2B电子商务发展影响因素框架构建与实证分析——技术创新视角的审视

企业技术创新的动机和影响是产业经济学的重要内容,而以互联网为基础的企业间电子商务的发展又是20世纪90年代以来产业组织中一项重大的技术创新。本文以技术创新为核心,构建了以创新特征、企业背景以及组织结构三方面10个子变量以及28个观测变量为基础的分析框架,并实证考察分析了影响企业间电子商务发展的因素。最后有针对性地进行了总结并提出需要进一步研究的问题。