Effects of Social Capital and Power on Surviving Transformational Change: The Case of Initial Public Offerings

We examined how social capital and the power of venture capitalists and founder-CEOs affect IPO firm survival. Using data from 218 U.S. initial public offerings conducted in 1992, we found that average management team tenure and an IPO deal's network embeddedness decreased the likelihood of fai...

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Bibliographic Details
Published in:Academy of Management journal 2004-08, Vol.47 (4), p.463-481
Main Authors: Fischer, Harald M., Pollock, Timothy G.
Format: Article
Language:English
Subjects:
Business failures
Business ownership
Business studies
Chief executive officers
Data analysis
Failure
Initial public offering
Initial public offerings
Management science
Organizational change
Regression analysis
Social capital
Studies
Venture capital companies
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Summary:We examined how social capital and the power of venture capitalists and founder-CEOs affect IPO firm survival. Using data from 218 U.S. initial public offerings conducted in 1992, we found that average management team tenure and an IPO deal's network embeddedness decreased the likelihood of failure during a firm's first five years as a public entity. Founder-CEO presence at the time of an IPO interacted with CEO ownership to decrease the likelihood of failure, and CEO ownership and venture capitalist ownership concentration also decreased that likelihood. [PUBLICATION ABSTRACT]
ISSN:0001-4273
1948-0989
DOI:10.5465/20159597