Eventi del

9 2014 12:45 - 14:00
Via Roentgen 1, 4th floor, room E4 SR03

GOING PUBLIC: HOW STOCK MARKET LISTING CHANGES FIRM INNOVATION BEHAVIOR

Christine Moorman, Duke University

While crucial for organizational performance, managing innovation is challenging for managers because it is expensive and payoffs are uncertain. This challenge is particularly pronounced for publicly-listed firms because, while the stock market provides access to financial capital that can fuel innovation, it also creates a set of incentives and disclosures that constrain innovation. We predict this tension produces a unique pattern of innovation strategies among firms going public. We test our predictions by examining 40,000 product introductions in a sample of consumer packaged goods firms that go public compared to a benchmark sample of similar firms that remain private from 1980-2011. Findings indicate that after going public, firms innovate at higher levels and introduce higher levels of variety with each innovation. At the same time, firms resort to less risky innovation, characterized by fewer breakthrough innovations and fewer innovations to new-to-the-firm categories. Our results offer implications for marketing managers in public firms and those firms planning to go public, as well as for policy makers who design the institutional environment in which publicly-listed firms innovate.

Keywords: Innovation, breakthrough innovation, stock market impact, IPO, marketing-finance interface, consumer packaged goods