Signaling Organizational Virtue: an Examination of Virtue Rhetoric, Country-Level Corruption, and Performance of Foreign IPOs from Emerging and Developed Economies

Extending signaling theory by discussing rhetoric in terms of cost and observability, we examine the relationship between organizational virtue rhetoric in prospectuses and the performance of foreign IPOs from 35 different countries. We also explore how the nature of this relationship is contingent...

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Bibliographic Details
Published in:Strategic entrepreneurship journal 2013-09, Vol.7 (3), p.230-251
Main Authors: Payne, G. Tyge, Moore, Curt B., Bell, R. Greg, Zachary, Miles A.
Format: Article
Language:English
Subjects:
Corruption
Developing countries
Economic growth
emerging economies
Emerging markets
ethics
foreign IPOs
Impact analysis
Initial public offerings
LDCs
Organizational behavior
organizational virtue
Prospecti
Rhetoric
signaling theory
Studies
underpricing
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Summary:Extending signaling theory by discussing rhetoric in terms of cost and observability, we examine the relationship between organizational virtue rhetoric in prospectuses and the performance of foreign IPOs from 35 different countries. We also explore how the nature of this relationship is contingent upon the level of perceived corruption for each IPO firm's home country, a pervasive and costly problem for emerging economy countries due to its impact on economic growth and national governance. Our results indicate that signaling organizational virtue in prospectuses leads to higher levels of foreign IPO performance, which is positively moderated by perceived home country corruption. Copyright © 2013 Strategic Management Society.
ISSN:1932-4391
1932-443X
DOI:10.1002/sej.1156