Who is Entrepreneurial? Evidence from Late Bloomer Firms with M&A strategies

51 Pages Posted: 30 Sep 2021 Last revised: 3 Nov 2021

See all articles by Magnus Blomkvist

Magnus Blomkvist

Audencia Business School; Audencia Business School

Nebojsa Dimic

University of Vaasa

Sofia Johan

Florida Atlantic University - Finance; University of Aberdeen; Tilburg Law and Economics Center (TILEC)

Milos Vulanovic

EDHEC Business School

Date Written: October 9, 2020

Abstract

The literature considers firms seeking finance through an initial public offering (IPO) as entrepreneurial. But are they? We hypothesize that firms in the latter stage of industry life-cycle, or late bloomer firms as less innovative, proactive, and risk-taking, signal entrepreneurial orientation with competitively aggressive M&A strategies. They strategically time an IPO to mitigate adverse selection. Analyzing U.S. data, we find that late bloomer firms are 54% more likely to engage in M&As four years following an IPO and acquire 42% faster following the IPO. This M&A pattern is more pronounced at the time of, and among firms with, capital constraints.

Keywords: Entrepreneurial orientation, Entrepreneurial posturing, Sustainable Competitive Advantage, Competitive aggressiveness, IPO, Mergers and Acquisitions, Industry Lifecycle, Resource Advantage.

JEL Classification: L10, L250, G34, G32

Suggested Citation

Blomkvist, Magnus and Dimic, Nebojsa and Johan, Sofia A. and Vulanovic, Milos, Who is Entrepreneurial? Evidence from Late Bloomer Firms with M&A strategies (October 9, 2020). Available at SSRN: https://ssrn.com/abstract=3708434 or http://dx.doi.org/10.2139/ssrn.3708434

Magnus Blomkvist

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Nebojsa Dimic

University of Vaasa ( email )

Wolffintie 34
Vaasa, 65200
Finland

Sofia A. Johan (Contact Author)

Florida Atlantic University - Finance ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/sofiajohan

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Milos Vulanovic

EDHEC Business School ( email )

24, avenue Gustave Delory
CS 50411
Roubaix, 59057
France

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