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This dissertation examines the relationship between the presence of international investors and firm success. The first chapter of my dissertation examines the relationship between international venture capital investors and private firm success spanning 81 countries over the years 1995-2010. The data examined indicate that, relative to deals in which the investor base is purely domestic, private firms that have an international investor base have a higher probability of exiting via an initial public offering (IPO) and higher IPO proceeds. The evidence is consistent with the view that while the benefits of internationalization may be difficult and costly to manage, for those firms that succeed in managing cross-border coordination costs, there is potential value for an IPO firm. The benefits relative to the costs of internationalizing the investor base for private firms sold in acquisitions, by contrast, are much less pronounced. The second chapter of my dissertation analyzes a firm's decision to issue new equity internationally. Though over eight percent of firms conducting an IPO between 1995 and 2010 choose to conduct foreign IPO, in which the firm issues only abroad, this form of IPO fails to raise significantly more proceeds net of costs than matched IPOs with similar firm characteristics. On the median, foreign IPO firms forego proceeds equal to $ 1.58 million, approximately 4.7% of the value of their total assets or 5% of their total net IPO proceeds. As firms select whether they will issue equity at home, abroad, or both, this result is surprising. We are unable to explain the difference in proceeds using any indirect costs or benefits of international issuances discussed in the literature or several additional hypotheses we propose - that firms may be attempting to take advantage of hotter IPO markets, lower indirect costs, a better legal environment, or the ability to issue subsequent SEOs. As we are unable to explain the difference in proceeds, this constitutes the Foreign IPO Puzzle.
A Dissertation submitted to the Department of Finance in partial fulfillment of the requirements for the degree of Doctor of Philosophy.
Bibliography Note
Includes bibliographical references.
Advisory Committee
April M. Knill, Professor Directing Dissertation; Thomas Zuehlke, University Representative; Yingmei Cheng, Committee Member; Irena Hutton, Committee Member.
Publisher
Florida State University
Identifier
FSU_migr_etd-9509
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