 Does going public in the U.S. facilitate corporate innovation of foreign firms?Kelly Cai and Hui Zhu The North American Journal of Economics and Finance, 2020, vol. 52, issue C Abstract: We examine how going public in the U.S. IPO market influences corporate innovation. Using 185 foreign and 2948 U.S. domestic firms going public in the U.S. over the 1980–2006 period, we find that while exhibiting similar innovativeness in the pre-IPO period, non-U.S. firms tend to generate more innovation than U.S. domestic firms after going public. The findings are robust to adopting subsample tests, various measures of changes in innovation around the year of the IPO, and accounting for truncation problems and potential endogeneity concerns. Further tests show that changes in innovation around the year of the IPO tend to be less prominent for non-U.S. firms that domiciled in countries with more developed equity market and higher level of economic freedom. Our study provides insights into the real effect of going public in the U.S. IPO market on innovative activities. Keywords: Corporate innovation; Foreign vs. domestic IPOs; Financial development; Economic freedom (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:52:y:2020:i:c:s1062940819300403 DOI: 10.1016/j.najef.2019.101107 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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