Alliance Network and Post-IPO Performance

It is well documented that IPO firms experience decline in long-run stock and operating performance. However, no prior research examines the association between firms accessing value-generating resources from environment and its post-IPO performance. IPO firms could have access to idiosyncratic resources via alliance networks to form the basis for competitive advantage, which lead to positive abnormal performance. The purpose of this paper is to investigate the relationship between alliance networks and a firm ’ post-IPO performance. First, we find that IPO firms with alliances experience better long-run stock and operating performance than those without alliances. Second, IPO firms occupying more important position in a network experience better long-run stock and operating performance compared to those with less important position in a network. Finally, the evidence further demonstrates that the partners ’ position in the network also has significant impacts on a firm’s post-IPO performance. Additionally, we show that IPO firms with alliances will have higher offer price, offer size and market-to-book ratio. Furthermore, they also attract more prestigious underwriters and greater institutional interest. Our overall results suggest that alliance networks play an important role in a firm’s post-IPO performance