The Effects of an IPO on Operational Performance of Rival Firms

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Moradi, Niloofar | 2023

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 56697 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Talebian, Masoud; Haghbaali, Mehdi
Abstract:
In this research, we tried to investigate the effect of a firm’s IPO on the operational performance of its rivals. We used a dynamic structural oligopoly model to distinguish between hypotheses that can explain the industry evolution after the initial public offering, to estimate the value of rival firms’ post-IPO. The results showed that rival firms suffered losses in most IPO events and these losses were caused by industry trends. However, in some IPOs, the initial impact of an IPO on rival firms was through changing production technologies or reducing product homogenization, which increased their profitability. A much smaller percentage of observations also found evidence of competitive effects of IPOs, where rival firms' performance decreased
Keywords:
Initial Public Offering ; Firm Value ; Initial Public Offering (IOP)Initial Impact ; Initial Public Offering (IOP)Reasons ; Value Estimation ; Dynamic Structural Oligopoly Model ; Competitive Effects

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