Navigating New Terrain: Domestic Geographical Dispersion and IPO Survival in the United States

Dimitrios Gounopoulos, Chen Huang and Yu Zhang

Journal of Business Finance & Accounting, 2026, vol. 53, issue 1, 352-379

Abstract: Using a text‐based measure to capture firms’ domestic geographic diversification within the United States, this study finds that newly listed firms with extensive geographic dispersion face an elevated risk of failure. This vulnerability is especially pronounced in industries dominated by soft information environments, where effective oversight is more difficult to achieve. However, several factors can mitigate this risk. Dispersed initial public offering (IPO) firms that are headquartered in metropolitan areas, maintain a higher proportion of operations in neighboring states, or benefit from strong external governance exhibit a greater likelihood of survival. These findings support the view that geographic dispersion intensifies information asymmetry and agency conflicts, which can divert managerial attention and undermine decision‐making effectiveness, ultimately increasing the likelihood of failure in the post‐IPO period.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jbfa.70020

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:53:y:2026:i:1:p:352-379

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X

Access Statistics for this article

Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker

More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().