Project
BUSN 280
Section: A
Submitted by: Muhammad Umar
Roll No: 221434025
Submitted to: Dr. Bushra Usman
Year Chosen: 1997
Authors
Brad M.
Barber
and John
D. Lyon
Year
1997
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
Barber
and Lyon
Abnormal
returns of the
IPO firm up to
three years after
IPO relative to a
control firm.
Book Review
Matchedpair buyand-hold
abnormal
returns
References: Brad M. Barber, John D. Lyon, Journal of Financial Economics, Volume 43, Issue 3, 1997,
Pages 341-372, ISSN 0304-405X,
https://doi.org/10.1016/S0304-405X(96)00890-2.
(https://www.sciencedirect.com/science/article/pii/S0304405X96008902)
Difference
in returns
between
the sample
firm and
a control
firm over a
period of
up to three
years
after the
IPO; the
control
firm has
the same
Wvo-digit
SIC code,
between
70%-130%
of the
market
value.
Authors
Year
Daily et al. 1997
Ritter and
Welch
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
A Review
of IPO
Activity,
Pricing,
and
Allocations
Also referred to
as underpricing;
the percentage
difference
between the
offer price at
which
the stock was
offered to
investors and
the first-day
closing price
Book Review
Initial
Returns
References: Jay Ritter & Ivo Welch, 1997.
"A Review of IPO Activity, Pricing, and Allocations,"
NBER Working Papers 8805, National Bureau of Economic Research, Inc.
<https://ideas.repec.org/p/nbr/nberwo/8805.html>
Ratio of the
first-day
closing price
obtained
from
CRSP and
the offer
price
obtained
from SDC
Platinum
New Issues
Database,
adjusted by
market
movements.
Authors
Year Article
Name
Mizik and
Myopic
Jacobson
1997 Marketing
Roychowdhury
Management:
Evidence of
the
Phenomenon
and Its LongTerm
Performance
Consequences
in the SEO
Context.
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Marketing
actions
motivated by
immediate,
tangible
outcomes,
such as growth
in current
earnings or
stock prices,
without
regard to longterm
implications.
Methodology Findings
Myopic
Book Review
Marketing
References: Natalie Mizik & Robert Jacobson, 1997.
"Myopic Marketing Management: Evidence of the Phenomenon and Its Long-Term
Performance Consequences in the SEO Context," Marketing Science, INFORMS, vol. 26(3),
pages 361-379, 05-06.
<https://ideas.repec.org/a/inm/ormksc/v26y1997i3p361-379.html>
Firms are
myopic if
they
report
higherthanexpected
earnings
along
with
lowerthanexpected
marketing
expenses
in the
year of
their IPO.
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
Xiong and
Bharadwaj
1997
Social
Capital of
Young
Technology
Firms and
Their IPO
Values
B2B
relationships,
social capital,
absorptive
capacity,
stochastic
frontier
estimation, IPO
value,
MarketingFinance
interface.
Book Review
Strategic
Alliances
Moderators
Number of
alliances
(new
product
and
marketing),
provided in
the IPO
prospectus
References: Xiong, Guiyang and Bharadwaj, Sundar G., Social Capital of Young Technology Firms and Their
IPO Values: The Complementary Role of Relevant Absorptive Capacity (May 23, 1997).
Journal of Marketing, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1850834
Authors
Year Article Name
Xiong and 1997 The
Complementary
Bharadwaj
Role of
Relevant
Absorptive
Capacity
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Managerial
implications
regarding
communicating
the value of
absorptive
capacity,
disclosure of
marketing
related
information,
and the
importance of
marketing for
young
technology
firms are also
provided.
Methodology Findings
Key
Literary Review "Major
Costumer
customers"
Relationship
that account
for more
than
10% of the
firm's
revenues,
provided in
the IPO
prospectus;
we include a
dummy
variable to
indicate
whether the
firm has key
customer
relationships.
References: Xiong, Guiyang and Bharadwaj, Sundar G., Social Capital of Young Technology Firms and Their
IPO Values: The Complementary Role of Relevant Absorptive Capacity (May 23, 1997).
Journal of Marketing, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1850834
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Mizik and
Jacobson
1997
Myopic
Relative focus
Marketing
on value
Management creation
versus value
appropriation
for
resource
deployments
within the
firm.
Strategic
Emphasis
Methodology Findings
Book Review
Ratio of
advertising
and R&D
expenses,
obtained
from
Compustat,
Factset,
and Capital
IQ.
References: Mizik, Natalie and Jacobson, Robert, Myopic Marketing Management: Evidence of the
Phenomenon and Its Long-Term Performance Consequences in the SEO Context. Marketing
Science, Fothcoming, Available at SSRN: https://ssrn.com/abstract=990768
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
Hanley
and
Leland
and Pyle
1997
The
Underpricing
of Initial
Public
Offerings
and the
Partial
Adjustment
Phenomenon
IPO pricing
flexibility
Information
about ownermanagers'
valuations.
Article Review
Percentage
width of
offer range
Ownership
dilution
References: Hanley, K. 1997. “The Underpricing of Initial Public Offerings and the Partial Adjustment
Phenomenon.”Journal of Financial Economics 34: 231–250.
Control
variables
Offer
width
divided by
lowest
offer price
(SDC)
Amount
of equity
stake that
managers
relinquish
at
the time
of an IPO
(SDC).
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Benveniste
and Spindt
1997
How
investment
bankers
determine
the offer
price and
allocation
of new
issues
Upward or
downward
revisions in
offer price
relative to the
file
price range.
Methodology Findings
Price
Journal Review
Adjustment
Revision
in offer
price from
the
midpoint
of the
original
file price
range
(SDC).
References: Benveniste, Lawrence M. & Spindt, Paul A., 1997.
"How investment bankers determine the offer price and allocation of new issues," Journal of
Financial Economics, Elsevier, vol. 24(2), pages 343-361.
<https://ideas.repec.org/a/eee/jfinec/v24y1997i2p343-361.html>
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
Pollock, T.
G., &
Rindova,
V. P.
1997
Media
Legitimation
Effects in
the Market
for Initial
Public
Offerings.
The relationship Venture
between the
Capital
tenor of media- Funding
provided
information and
underpricing
increases at a
nonlinear rate,
and decreases
similarly for
turnover.
Article Review
Dummy
variable
that equals
1 if the firm
has been
funded by
venture
capital and
0 otherwise
(IPO
prospectus).
References: Pollock, T. G., & Rindova, V. P. (1997). Media Legitimation Effects in the Market for Initial
Public Offerings. Academy of Management Journal, 46(5), 631–642.
https://doi.org/10.2307/30040654
Authors Year Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Harjeet
S.
Bhabra
&
Richard
H.
Pettway
We found that
firms that
subsequently
reissue equity
or merge
outperform
their matched‐
firm
benchmarks
over three
years.
1997 IPO
Prospectus
Information
and
Subsequent
Performance.
Methodology Findings
Underwriter Literary Review UnderReputation
performance is
most severe for
the smaller and
younger firms.
We find that
prospectus
information is
more useful to
predict
survival/failure
compared to
subsequent
equity offerings or
acquisitions.
References: Harjeet S. Bhabra & Richard H. Pettway, 1997.
"IPO Prospectus Information and Subsequent Performance," The Financial Review, Eastern
Finance Association, vol. 38(3), pages 369-397, August.
<https://ideas.repec.org/a/bla/finrev/v38y1997i3p369-397.html>
Authors
Year
Thomas J.
1997
Chemmanur
& An Yan
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
Advertising,
Attention,
and Stock
Returns
The effect of
advertising on
future stock
returns is
stronger when
advertising
increases
compared to
the case when
advertising
decreases.
Journal Review
Run-Up
References: Thomas J. Chemmanur & An Yan, 1997.
"Advertising, Attention, and Stock Returns," Quarterly Journal of Finance (QJF), World
Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 1-51, September.
<https://ideas.repec.org/a/wsi/qjfxxx/v09y1997i03ns1997139219500095.html>
We
conjecture
that
advertising
affects
stock
returns by
attracting
investors’
attention to
the firm’s
stock.
Stock price
increases
in the
advertising
year due to
the
attracted
attention,
but
decreases
in the
subsequent
year as the
attracted
attention
wears out
over time.
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Methodology Findings
SCHWERT,
G. &
Lowry,
Michelle &
OFFICER,
MICAH.
1997
The
Variability
of IPO
Initial
Returns
One implication Journal
of our results is of
that alternate
Finance
mechanisms,
such as
auctions, could
be beneficial for
firms that value
price discovery
over the
auxiliary
services
provided by
underwriters.
Journal Review
Our findings
highlight
underwriters'
difficulty in
valuing
companies
characterized
by high
uncertainty,
and raise
serious
questions
about the
efficacy of
the
traditional
firmcommitment
IPO process.
References: SCHWERT, G. & Lowry, Michelle & OFFICER, MICAH. (1997). The Variability of IPO Initial
Returns. Journal of Finance. 65. 425-465. 10.2139/ssrn.904683.
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Bhabra,
H.S., &
Pettway,
R.H.
1997
IPO
Stability and
Prospectus
Formalization
Information
and
Subsequent
Performance.
Firm-Size
Methodology Findings
Book Review
References: Bhabra, H.S., & Pettway, R.H. (1997). IPO Prospectus Information and Subsequent
Performance. The Financial Review, 38, 369-397.
Sales and
total assets
at time of
IPO (IPO
prospectus,
Compustat,
Capital IQ).
Authors
Year Article
Name
Idea/Purpose/ Theory Methodology Findings
Marketing
Myopia and
its
Relationship
Li, Jinliang &
1997 Earnings
Stability and
Zhang, Lu &
Management formalization
Zhou, Jian &
and Delisting Profitability of
Binghamton,
Risk of Initial the firm.
Suny &
Public
Ahmed,
Offerings.
Anwer &
Harris, David
& Hendrickx,
Margaretha &
Jagannathan,
Murali &
Pedersen,
Lasse &
Reiter, Sara &
Subramanyan,
Marti & Wei,
Kelsey &
Yetman,
Michelle &
Zhou, Nan &
Seminar.
Firmage Net
Income
Journal Review
Years in
existence
at time of
IPO (IPO
prospectus)
Net income
obtained
from
Compustat,
Capital IQ,
and
Factset.
References: Li, Jinliang & Zhang, Lu & Zhou, Jian & Binghamton, Suny & Ahmed, Anwer & Harris, David &
Hendrickx, Margaretha & Jagannathan, Murali & Pedersen, Lasse & Reiter, Sara &
Subramanyan, Marti & Wei, Kelsey & Yetman, Michelle & Zhou, Nan & Seminar,. (1997).
Earnings Management and Delisting Risk of Initial Public Offerings. SSRN Electronic Journal.
10.2139/ssrn.641021.
Authors Year Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Barker,
Vincent
&
Mueller,
George.
CEO's
experiential
understanding
of
the marketing
function.
1997
CEO
characteristics
and firm R&D
spending.
Management
Science
Methodology Findings
Functional Article Review
Background
of CEO
References: Barker, Vincent & Mueller, George. (1997). CEO characteristics and firm R&D spending.
Management Science. 48. 782-801. 10.1287/mnsc.48.6.782.187.
We found
Dummy
variable to
capture
CEO's
marketing
background
(IPO
prospectus)
Authors
Year
Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Pollock,
Timothy
&
Rindova,
Violina.
1997
Media
legitimation
effects in
the market
for initial
public
offerings
The relationship
between the
tenor of mediaprovided
information and
underpricing.
Methodology Findings
Market
Journal Review
enthusiasm
prior to
IPO.
Findings
provide
important
evidence
that
publicly
available
information
not only
reflects
IPOs' legitimacy, but
also adds
to their
legitimacy
and
influences
investor
behavior.
References: Pollock, Timothy & Rindova, Violina. (1997). Media legitimation effects in the market for
initial public offerings. Academy of Management Journal. 46. 10.2307/30040654.
Authors Year Article
Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Lee,
Ruby &
Grewal,
Rajdeep
Industry
competitiveness
Pace of market
change.
1997 Strategic
Responses to
New
Technologies
and Their
Impact on
Firm
Performance.
Methodology Findings
Competitive Journal Review
intensity
Market
turbulence.
Herfindahl
index
Ratio of sales
and general
administrative
expenses
to sales of
firms in the
same SIC
code
(Compustat).
References: Lee, Ruby & Grewal, Rajdeep. (1997). Strategic Responses to New Technologies and Their
Impact on Firm Performance. Journal of Marketing. 68. 157-171.
10.1509/jmkg.68.4.157.42730.
Authors Year Article Name
Idea/Purpose/ Theory
Marketing
Myopia and
its
Relationship
Osborn,
R., &
Baughn,
C
Represents
1997
Forms of
Interorganizational pace of
technological
Governance for
change.
Multinational
Alliances.
Methodology Findings
Technological Journal Review
turbulence.
References: Osborn, R., & Baughn, C. (1997). Forms of Interorganizational Governance for Multinational
Alliances. The Academy of Management Journal, 33(3), 503-519. Retrieved February 20, 2021,
from http://www.jstor.org/stable/256578
…………………………………………..
Ratio of R&D
investments
to sales of
the firms in
the same SIC
code
(Compustat).
Descriptive Analysis
We investigate the experimental force and particular of test measurements in occasion
considers intended to recognize since a long time ago run irregular stock returns. We report
that test insights dependent on unusual returns determined utilizing a reference portfolio,
for example, a market record, are mis indicated and distinguish three purposes behind this
misspecification. We audit the hypothesis and proof on IPO movement: why firms open to
the world, why they reward first-day financial backers with extensive undervaluing, and how
IPOs act over the long haul. Our viewpoint on the writing is three-overlap: First, we accept
that numerous IPO wonders are not fixed. Second, we accept investigation into share
allotment issues is the most encouraging zone of examination in IPOs now. Third, we
contend that lopsided data is not the essential driver of numerous IPO wonders. Supervisors
frequently have motivators to falsely swell current-term income by cutting advertising
consumptions, regardless of whether it comes to the detriment of long-haul benefits. Since
financial backers depend on current-term bookkeeping measures to shape assumptions for
future-term benefits, blowing up current-term results can prompt improved current-term
stock cost. We present proof that a few firms participate in this sort of «myopic showcasing
management» at the hour of a prepared value offering. As one of the principal concentrates
in showcasing account interface to zero in on youthful firms, the discoveries give novel bits
of knowledge. A more noteworthy extent of firms than ordinary report profits higher than
typical and advertising consumptions lower than ordinary at the hour of their SEO. Although
they understand that organizations might be attempted methodologies to misleadingly
expand current-term profit, the monetary business sectors are not sufficiently recognizing
and appropriately esteeming the organizations doing as such.
The essential regions of IPO research are momentarily investigated. The five articles of this
exploration discussion are set inside this assemblage of examination. The JEF editors show
issues specifically noteworthy for future IPO research entries. We research how venture
brokers use signs of revenue from their customer financial backers to cost and assign new
issues. We model the cycle as a bartering built to incite unevenly educated financial backers
to uncover what they know to the guarantor. In this examination, we contend that media-if
data influences financial backers' impressions of recently open firms. In 225 introductory
public contributions, the volume of media gave data had a negative, decreasing relationship
with undervaluing and a positive, lessening relationship with stock turnover on the main day
of exchanging.
We locate that a more noteworthy measure of promoting is related with a bigger stock
return in the publicizing year yet a more modest stock return in the quite a long time after
the promoting year, even after we control for other value indicators, like size, book-tomarket, and energy. The month-to-month instability of IPO introductory returns is
significant, vacillates drastically over the long haul, and is impressively bigger during IPO
markets. Steady with IPO hypothesis, the instability of starting returns is higher for firms
that are harder to esteem because of higher data lopsidedness. Underperformance is
generally serious for the more modest and more youthful firms. We find that plan data is
more valuable to anticipate endurance/disappointment contrasted with resulting value
contributions or acquisitions. Both profit the executives in the IPO cycle and the ex-bet
delisting danger of recently gave firms are identified with firm essentials. With an example
of IPOs from 1980 to 1999, we locate that the level of income the board has critical
prescient force on IPO disappointment. In recent years, a couple of studies have inspected
the determinants of firm R&D spending. These examinations, be that as it may, constantly
center around the part of firm or outer possession qualities in foreseeing R&D spending
while at the same time disregarding the ascribes of the top administrators associated with
dispensing corporate assets.
In this examination, we contend that media-if data influences financial backers' impressions
of recently open firms.
…………………………………………..