- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
Hospitality firms spend significant amounts on marketing activities post-IPO. It is critical to understand the driving force behind these firms’ aggressive marketing strategies. This study examines the impact of Initial Public Offering (IPO) overhang on the marketing activity of newly public firms in the U.S. hospitality industry. IPO overhang measures the ownership retained by pre-existing shareholders who are mostly corporate insiders. Our results indicate that IPO overhang is positively associated with post-IPO marketing intensity up to three years post-IPO. Further, the marketing activity by newly public firms is associated with higher equity market liquidity, consistent with the view that marketing activity promotes equity market liquidity and thus facilitates insiders’ exit. Our findings provide an avenue for IPO firms to manage the negative price impact of corporate insiders’ cash-out, and a partial explanation for newly public firms’ aggressive investments in marketing.
5. Conclusion, managerial implications, and limitations
Examining hospitality IPOs, we demonstrate the significant impact of IPO overhang, which measures pre-IPO shareholders’ ownership, in regards to post-IPO marketing spending for up to three years post-IPO. Additionally, marketing spending increases dramatically during these three years and is diminished thereafter. Finally, marketing spending enhances equity market liquidity. These findings are consistent with the view that marketing activities facilitate insiders’ exit by reducing the price impact of their cash-out. Our findings are potentially meaningful for at least three reasons. First, we are among the first cohort to investigate how the IPO process and its outcomes affect hospitality firms’ post-IPO marketing spending. At a broad level, the theoretical scope of our research is to advance the understanding of IPO ownership structure on post-IPO investments. More specifically, our research highlights a statistically significant and economically meaningful impact on marketing expenditures by IPO overhang. Baloglu and Assante (1999) divided hospitality research into six fields: (1) marketing; (2) finance; (3) administration/strategy; (4) operations; (5) research and development; and (6) human resources.