The Effect of Initial Public Offering (IPO) Firm Legitimacy on Cooperative Agreements and Performance
AIR FORCE INST OF TECH WRIGHT-PATTERSONAFB OH
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This dissertation examines firm legitimacy at the time of a firms initial public stock offering IPO and its impact on the quantity and quality of cooperative agreements post-IPO. Firm legitimacy is operationalized at the time of IPO as a combination of total firm value, number of employees, firm age, market-to-book ratio, and percentage of ownership maintained by the original owners. The dissertation finds that firm value, market-to-book ratio, and firm age are positively related to an increase in the quantity of cooperative agreements while only the value of the firm at time of IPO is positively related to the quality of cooperative agreements post-IPO. The dissertation also finds that increased use of cooperative agreements in the post-IPO environment does not positively affect firm performance. Firm performance is operationalized as changes in stock price, sales growth, and return on investment ROI. A negative relationship is found to exist between increased cooperative agreements and firm ROI. These results are important because they provide some initial insights into which variables typically associated with firm legitimacy have the greatest association with the quantity and quality of cooperative agreements established by firms at the critical time of their initial public stock offerings and subsequent firm performance.
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