The Ethical Pitfalls and Opportunities of Initial Public Offerings
Abbey Stemler and
Timothy L. Fort
A chapter in The Challenges of Ethics and Entrepreneurship in the Global Environment, 2015, vol. 25, pp 39-56 from Emerald Publishing Ltd
Abstract Initial public offerings (IPOs) have been a focus of qualitative and quantitative research since the 1960s. However, the majority of research emanates from the fields of finance and management, with very little coming from the field of ethics. In this paper, we attempt to fill this gap by answering the question: Does the IPO process change a company’s ethical culture? In order to answer this question we examined S-1 filings made by companies before they went public. We used text-mining techniques to identify words that are uniquely related to corporate social responsibility (CSR) in those filings. We then used linear regression to compare those word counts to data produced by CSRHub. Companies that include words related to CSR tend to score better on various CSR measures. This evidence can support several explanatory theories, such as companies that take the time and effort to discuss CSR concepts in their S-1s make ethics a priority and therefore score higher on CSR ratings. Similarly, companies that had never formally thought about their ethical culture might feel, under the pressure of an IPO, to think about what kind of company the owners and leadership want it to be in the long run. Our study only analyzed companies three years post-IPO and did not control for certain variables. This paper is the first of its kind to discuss and, more importantly, attempt to quantify the impact of the IPO process on a company’s ethical culture. We hope that by understanding how the IPO process influences companies in terms of ethics, companies can more easily develop and maintain ethical cultures pre- and post-IPO.
Keywords: Ethics; IPOs; corporate social responsibility; S-1 filings (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/S1048-473620 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:aseizz:s1048-473620150000025003
Ordering information: This item can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldgr ... ies.htm?id=1048-4736
Access Statistics for this chapter
More chapters in Advances in the Study of Entrepreneurship, Innovation and Economic Growth from Emerald Publishing Ltd
Bibliographic data for series maintained by Charlotte Maiorana ().