261
Views
1
CrossRef citations to date
0
Altmetric
Articles

The effect of brand diversification on IPO returns: An examination of restaurant IPOs

, &

References

  • Aaker, D. A. (2006). Brand portfolio strategy. Strategic Direction, 22(10). doi:10.1108/sd.2006.05622jae.001
  • Aaker, D. A., & Joachimsthaler, E. (2000). The brand relationship spectrum: The key to the brand architecture challenge. California Management Review, 42(4), 8.
  • Allen, F., & Faulhaber, G. R. (1989). Signaling by underpricing in the IPO market. Journal of Financial Economics, 23, 303–324. doi:10.1016/0304-405X(89)90060-3
  • Ambler, T. (2003). Marketing and the bottom line: Creating the measures of success. London, UK: Financial Times/Prentice Hall.
  • Amit, R., & Livnat, J. (1988). Diversification strategies, business cycles and economic performance. Strategic Management Journal, 9(2), 99–110. doi:10.1002/(ISSN)1097-0266
  • Angulo-Ruiz, F., Donthu, N., Prior, D., & Rialp, J. (2018). How does marketing capability impact abnormal stock returns? The mediating role of growth. Journal of Business Research, 82, 19–30. doi:10.1016/j.jbusres.2017.08.020
  • Bahadir, S. C., Bharadwaj, S. G., & Srivastava, R. K. (2008). Financial value of brands in mergers and acquisitions: Is value in the eye of the beholder? Journal of Marketing, 72(6), 49–64. doi:10.1509/jmkg.72.6.049
  • Barry, C. B., Muscarella, C. J., Peavy, J. W., & Vetsuypens, M. R. (1990). The role of venture capital in the creation of public companies. Evidence from the going-public process. Journal of Financial Economics, 27(2), 447–471. doi:10.1016/0304-405X(90)90064-7
  • Barth, M. E., Clement, M. B., Foster, G., & Kasznik, R. (1998). Brand values and capital market valuation. Review of Accounting Studies, 3, 41–68. doi:10.1023/A:1009620132177
  • Beatty, R. P., & Zajac, E. J. (1994). Managerial incentives, monitoring, and risk bearing: A study of executive compensation, ownerhsip, and board structure in initial public offerings. Administrative Science Quarterly, 39, 313–335. doi:10.2307/2393238
  • Benveniste, L. M., & Spindt, P. A. (1989). How investment bankers determine the offer price and allocation of new issues. Journal of Financial Economics, 24, 343–362. doi:10.1016/0304-405X(89)90051-2
  • Berry, C. H. (1971). Corporate growth and diversification. Journal of Law and Economics, 14, 371–383. doi:10.1086/466714
  • Berry-Stölzle, T. R., Liebenberg, A. P., Ruhland, J. S., & Sommer, D. W. (2011). Determinants of corporate diversification: Evidence from the property-liability insurance. The Journal of Risk and Insurance, 79(2), 381–413. doi:10.1111/j.1539-6975.2011.01423.x
  • Bettis, R. A., & Mahajan, V. (1985). Risk/return performance of diversified firms. Management Science, 31(7), 785–799. doi:10.1287/mnsc.31.7.785
  • Booth, J. R., & Chua, L. (1996). Ownerhsip dispersion, costly information, and IPO underprcing. Journal of Financial Economics, 41, 291–310. doi:10.1016/0304-405X(95)00862-9
  • Bordley, R. (2003). Determining the appropriate depth and breadth of a firm’s product portfolio. Journal of Marketing Research, 40(1), 39–53. doi:10.1509/jmkr.40.1.39.19126
  • Boulton, T. J., Smart, S. B., & Zutter, C. J. (2013). Industrial diversification and underpricing of initial public offerings. Financial Management, 42(3), 679–704. doi:10.1111/fima.12012
  • Cai, X., Liu, G. S., & Mase, B. (2008). The long-run performance of initial public offerings and its determinants: the case of China. Review of Quantitative Finance and Accounting, 30(4), 419–432. doi:10.1007/s11156-007-0064-5
  • Canina, L., Chang, C., & Gibson, S. (2008). IPO Underpricing in the hospitality industry: A necessary evil? The Journal of Hospitality Financial Management, 16(2), 33–54. doi:10.1080/10913211.2008.10653861
  • Canina, L., & Gibson, S. (2003). Understanding first-day returns of hospitality initial public offerings. Cornell Hotel and Restaurant Administration Quarterly, 44(4), 17–28. doi:10.1016/S0010-8804(03)90255-2
  • Capron, L., & Hulland, J. (1999). Redeployment of brands, sales forces, and general marketing management expertise following horizontal acquisitions: A resource-based view. Journal of Marketing, 63, 41–54. doi:10.1177/002224299906300203
  • Carter, R., & Manaster, S. (1990). Initial public offerings and underwriter reputation. The Journal of Finance, 45(4), 1045–1067. doi:10.1111/j.1540-6261.1990.tb02426.x
  • Carter, R. B., Dark, F. H., & Singh, A. K. (1998). Underwriter reputation, initial returns, and the long‐run performance of IPO stocks. The Journal of Finance, 53(1), 285–311. doi:10.1111/0022-1082.104624
  • Certo, S. T., Daily, C. M., & Dalton, D. R. (2001). Signaling firm value through board structure: An investigation of initial public offerings. Entrepreneurship: Theory and Practice, 26, 33–50.
  • Chi, J., & Padgett, C. (2006). Operating performance and its relationship to market performance of Chinese initial public offerings. Chinese Economy, 39(5), 28–50. doi:10.2753/CES1097-1475390502
  • Choi, K., Kang, K. H., Lee, S., & Lee, K. (2011). Impact of brand diversification on firm performance: A study of restaurant firms. Tourism Economics, 17(4), 885–903. doi:10.5367/te.2011.0059
  • Dalbor, M. C., & Sullivan, M. J. (2005). The initial public offerings of restaurant firms: The case of industry‐specific micromarket capitalization offerings. Journal of Small Business Management, 43(3), 226–241. doi:10.1111/jsbm.2005.43.issue-3
  • Daugherty, M. S., & Jithendranathan, T. (2012). Underpricing of IPOs of U.S. family-controlled businesses. International Research Journal of Finance and Economics, 90, 193–206.
  • Deeds, D. L., De Carolis, D. M., & Coombs, J. E. (1997). The impact of firm-specific capabilities on the amount of capital raise in an initial public offering: Evidence from the biotechnology industry. Journal of Business Venturing, 12(1), 31–46. doi:10.1016/S0883-9026(97)84970-1
  • Eckbo, B. E., & Norli, O. (2005). Liquidity risk, leverage and long-run IPO returns. Journal of Corporate Finance, 11(1–2), 1–35. doi:10.1016/j.jcorpfin.2004.02.002
  • Erdem, T., & Swait, J. (1998). Brand equity as a signaling phenomenon. Journal of Consumer Psychology, 7(2), 131–157. doi:10.1207/s15327663jcp0702_02
  • Fama, E. F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of Financial Econmics, 49, 283–306. doi:10.1016/S0304-405X(98)00026-9
  • Fama, E. F., & French, K. R. (1996). Multifactor explanations of asset pricing anomalies. Journal of Finance, 51(1), 55–84. doi:10.1111/j.1540-6261.1996.tb05202.x
  • Farquhar, P. H. (1989). Managing brand equity. Marketing Research, 1(1), 24–33.
  • Fine, M. B., Gleason, K., & Mullen, M. (2017). Marketing spending and aftermarket performance of IPO firms. Marketing Intelligence & Planning, 35(4), 560–576. doi:10.1108/MIP-05-2016-0083
  • Gelsi, S. (2006, January 26). Chipotle IPO gains 100%. Retrieved from https://www.marketwatch.com/story/chipotle-deal-rolls-into-history-books-with-100-rise
  • Goergen, M., Khurshed, A., & Mudambi, R. (2007). The long-run performance of UK IPOs: Can it be predicted? Managerial Finance, 33(6), 401–419. doi:10.1108/03074350710748759
  • Grinblatt, M., & Hwang, C. Y. (1989). Signaling and the pricing of unseasoned new issues. Journal of Finance, 44, 393–420. doi:10.1111/j.1540-6261.1989.tb05063.x
  • Habib, M. A., & Ljungqvist, A. P. (2001). Underpricing and entrepreneurial wealth lossses in IPOs: Theory and evidence. The Review of Financial Studies, 14(2), 433–458. doi:10.1093/rfs/14.2.433
  • Hadlock, C. J., Ryngaert, M., & Thomas, S. (2001). Corporate structure and equity offerings: Are there benefits to diversification? The Journal of Business, 74(4), 613–635. doi:10.1086/jb.2001.74.issue-4
  • Hanley, K. W. (1993). The underpricing of initial public offerings and the partial adjustment phenomenon. Journal of Financial Economics, 34(2), 231–250. doi:10.1016/0304-405X(93)90019-8
  • Hsu, L., Fournier, S., & Srinivasan, S. (2015). Brand architecture strategy and firm value: How leveraging, separating, and distancing the corporate brand affects risk and returns. Journal of the Academy of Marketing Science, 44(2), 261–280. doi:10.1007/s11747-014-0422-5
  • Ibbotson, R. G. (1975). Price performance of common stock new issues. Journal of Financial Economics, 2(3), 235–272. doi:10.1016/0304-405X(75)90015-X
  • Ibbotson, R. G., Sindelar, J., & Ritter, J. (1988). Initial public offerings. Journal of Applied Corporate Finance, 1, 37–45. doi:10.1111/jacf.1988.1.issue-2
  • Jain, B. A., & Kini, O. (1994). The post‐issue operating performance of IPO firms. The Journal of Finance, 49(5), 1699–1726. doi:10.1111/j.1540-6261.1994.tb04778.x
  • Jain, B. A., & Kini, O. (2000). Does the presence of venture capitalists improve the survival profile of IPO firms? Journal of Business Finance & Accounting, 27(9–10), 1139–1183. doi:10.1111/1468-5957.00350
  • Jain, B. A., & Kini, O. (2008). The impact of strategic investment choices on post‐issue operating performance and survival of US IPO firms. Journal of Business Finance & Accounting, 35(3–4), 459–490. doi:10.1111/j.1468-5957.2007.02072.x
  • James, C., & Wier, P. (1990). Borrowing relationships, intermediation and the cost of issuing public securities. Journal of Financial Economics, 28, 149–171. doi:10.1016/0304-405X(90)90051-Z
  • Jiang, W., Dev, C., & Rao, V. R. (2002). Brand extension and customer loyalty: Evidence from the lodging industry. Cornell Hotel and Restaurant Administration Quarterly, 43(4), 5–16. doi:10.1016/S0010-8804(02)80037-4
  • Kahneman, D., & Tversky, A. (1982). The psychology of preferences. Scientific American, 246(1), 160–173. doi:10.1038/scientificamerican0182-160
  • Kang, K. H., & Lee, S. (2014). The moderating role of brand diversification on the relationship between geographic diversification and firm performance in the US lodging industry. International Journal of Hospitality Management, 38, 106–117. doi:10.1016/j.ijhm.2013.01.001
  • Kapferer, J. N. (1994). Strategic brand management: New approaches to creating and evaluating brand equity. New York, NY, USA: Simon and Schuster.
  • Kekre, S., & Srinivasan, K. (1990). Broader product line: A necessity to achieve success? Management Science, 36(10), 1216–1232. doi:10.1287/mnsc.36.10.1216
  • Keller, K. L. (1997). Strategic brand management. Upper Saddle River, New Jersey: Prentice Hall.
  • Kennedy, P. (1998). A guide to econometrics (4th ed.). Cambridge,MA: MIT Press.
  • Kenney, M., & Patton, D. (2017). Firm database of emerging growth initial public offerings (IPOs) from 1990 through 2015.
  • Kim, J., Krinsky, I., & Lee, J. (1995). The role of financial variables in the pricing of Korean initial public offerings. Pacific-Basin Finance Journal, 3, 449–464. doi:10.1016/0927-538X(95)00017-F
  • Kiymaz, H. (2000). The initial and aftermarket performance of IPOs in an emerging market: evidence from Istanbul stock exchange. Journal of Multinational Financial Management, 10(2), 213–227. doi:10.1016/S1042-444X(99)00027-4
  • Klein, A. (1996). The association between the information contained in the prospectus and the price of initial public offerings. Journal of Financial Statament Analysis, 2, 23–40.
  • Krinsky, I., & Rotenberg, W. (1989). Signaling and the valuation of unseasoned new issues revisited. Journal of Financial and Quantitative Analysis, 24, 257–266. doi:10.2307/2330775
  • Kumar, N. (2003). Kill a brand, keep a customer. Harvard Business Review, 81(12), 86.
  • Lancaster, K. (1990). The economics of product variety: A survey. Marketing Science, 9(3), 189–206. doi:10.1287/mksc.9.3.189
  • Loughran, T., & Ritter, J. R. (1995). The new issue puzzle. The Journal of Finance, 50(1), 23–51. doi:10.1111/j.1540-6261.1995.tb05166.x
  • Loughran, T., Ritter, J. R., & Rydqvist, K. (1994). Initial public offerings: International insights. Pacific-Basin Finance Journal, 2(2–3), 165–199. doi:10.1016/0927-538X(94)90016-7
  • Lowry, M., & Shu, S. (2002). Litigation risk and IPO underpricing. Journal of Financial Economics, 65, 309–335. doi:10.1016/S0304-405X(02)00144-7
  • Luo, X. (2008). When marketing strategy first meets wall street: Marketing spendings and firms’ initial public offerings. Journal of Marketing, 72(5), 98–109.
  • Madden, T. J., Fehle, R. F., & Fournier, S. (2006). Brands matter: An empirical demonstration of the creation of shareholder value through brands. Journal of the Academy of Marketing Science, 34(2), 224–235. doi:10.1177/0092070305283356
  • Megginson, W. L., & Weiss, K. A. (1991). Venture capitalist certification in initial public offerings. The Journal of Finance, 46(3), 879–903. doi:10.1111/j.1540-6261.1991.tb03770.x
  • Mizik, N., & Jacobson, R. (2008). The financial value impact of perceptual brand attributes. Journal of Marketing Research, 45(1), 15–32. doi:10.1509/jmkr.45.1.15
  • Mizik, N., & Jacobson, R. (2009). Financial markets research in marketing, commentaries and rejoinder to marketing and firm value: Metrics, methods, findings, and future directions. Journal of Marketing Research, 46(3), 320–324.
  • Morgan, N. A., & Rego, L. L. (2009). Brand portfolio strategy and firm performance. Journal of Marketing, 73(1), 59–74. doi:10.1509/jmkg.73.1.59
  • Nayyar, P. R. (1993). Stock market reactions to related diversification moves by service firms seeking benefits from information asymmetry and economies of scope. Strategic Management Journal, 14(8), 569–591. doi:10.1002/(ISSN)1097-0266
  • Park, C. W., Jaworski, B. J., & Maclnnis, D. J. (1986). Strategic brand concept-image management. The Journal of Marketing, 50, 135–145. doi:10.1177/002224298605000401
  • Picker, L., & Giammona, C. (2015, January 30). Shake Shack jumps in debut after raising $105 million in IPO. Retrieved from https://www.bloomberg.com/news/articles/2015-01-29/shake-shack-raises-105-million-pricing-ipo-above-marketed-range
  • Purnanandam, A., & Swaminathan, B. (2004). Are IPOs really underpriced? Review of Financial Studies, 17, 811–848. doi:10.1093/rfs/hhg055
  • Quelch, J. A., & Kenny, D. (1994). Extend profits, not product lines. Harvard Business Review, 72(5), 153–160.
  • Rajan, R., Servaes, H., & Zingales, L. (2000). The cost of diversity: The diversification discount and inefficient investment. The Journal of Finance, 55(1), 35–80. doi:10.1111/0022-1082.00200
  • Ritter, J. R. (1984). The “hot issue” market of 1980. Journal of Business, 215–240. doi:10.1086/296260
  • Ritter, J. R. (1991). The long‐run performance of initial public offerings. The Journal of Finance, 46(1), 3–27. doi:10.1111/j.1540-6261.1991.tb03743.x
  • Ritter, J. R., & Welch, I. (2002). A review of IPO activity, pricing, and allocations. The Journal of Finance, 57(4), 1795–1828. doi:10.1111/1540-6261.00478
  • Rock, K. (1986). Why new issues are underpriced. Journal of Financial Economics, 15, 187–212. doi:10.1016/0304-405X(86)90054-1
  • Rumelt, R. P. (1982). Diversification strategy and profitability. Strategic Management Journal, 3(4), 359–369. doi:10.1002/(ISSN)1097-0266
  • Simon, C. J., & Sullivan, M. W. (1993). The measurement and determinants of brand equity: A financial approach. Marketing Science, 12(1), 28–52. doi:10.1287/mksc.12.1.28
  • Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. doi:10.2307/1882010
  • Spence, M. (2002). Signaling in retrospect and the informational structure of markets. American Economic Review, 92(3), 434–459. doi:10.1257/00028280260136200
  • Srivastava, R. K., Shervani, T. A., & Fahey, L. (1998). Market-based assets and shareholder value: A framework for analysis. The Journal of Marketing, 62, 2–18. doi:10.1177/002224299806200102
  • Stoll, H. R., & Curley, A. J. (1970). Small business and the new issues market for equities. Journal of Financial and Quantitative Analysis, 5(3), 309–322. doi:10.2307/2329998
  • Su, W., & Tsang, E. W. K. (2015). Product diversification and financial performance: The moderating role of secondary stakeholders. Academy of Management Journal, 58(4), 1128–1148. doi:10.5465/amj.2013.0454
  • Teoh, S. H., Welch, I., & Wong, T. J. (1998). Earnings management and the long‐run market performance of initial public offerings. The Journal of Finance, 53(6), 1935–1974. doi:10.1111/0022-1082.00079
  • Trueman, B. (1986). The relationship between the level of capital expenditures and firm value. Journal of Financial and Quantitative Analysis, 21, 115–129. doi:10.2307/2330732
  • Utamaningsih, A., Tandelilin, E., Husnan, S., & Sartono, R. A. (2013). Asymmetric information in the ipo underwriting process on the indonesia stock exchange: Pricing, initial allocation, underpricing, and price stabilization. Journal of Indonesian Economy and Business, 28(3), 311.
  • Welch, I. (1989). Seasoned offerings, imitation costs and the underpricing of initial public offerings. Journal of Finance, 44, 421–450. doi:10.1111/j.1540-6261.1989.tb05064.x
  • Welch, L. (1992). Sequential sales, learning and cascades. Journal of Finance, 47, 695–732. doi:10.1111/j.1540-6261.1992.tb04406.x
  • Wernerfelt, B., & Montgomery, C. A. (1988). Tobin’s q and the importance of focus in firm performance. The American Economic Review, 78(1), 246–250.
  • Yatim, P. (2011). Underpricing and board structures: An investigation of Malaysian initial public offerings (IPOs). Asian Academy of Management Journal of Accounting and Finance, 7(1), 73–93.
  • Zheng, S. X., & Stangeland, D. A. (2007). IPO underpricing, firm quality, and analyst forecasts. Financial Management, 36(2), 1–20. doi:10.1111/fima.2007.36.issue-2

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.