Operating characteristics, risk, and performance of born-global firms
Kimberly C. Gleason
Purpose – To determine what characteristics distinguish firms that conduct international business within three years of going public and six years from founding, and how these firms perform. Design/methodology/approach – A logistic regression analysis is used to identify characteristics that distinguish firms that are international at the time they go public, versus those that are not. The paper also assesses post-IPO performance and apply multivariate analysis to determine how performance varies among these firms. Findings – Compared to firms of similar age who do not pursue rapid internationalization, born-global firms are generally larger, more diversified, and have more venture capital backing. Their founders, board members and managers exhibit more international experience. The returns 12 and 18 months post-IPO are significantly higher for born-global firms than for a control sample of firms who do not engage in rapid internationalization. Furthermore, those born-global firms with joint ventures or acquisitions in several countries perform better than those that only export within the first six years since their inception. Research limitations/implications – Managerial implications include having a board of directors with sound international business experience as well as using a venture capital firm to provide monitoring and oversight of operations at home and in the foreign market. Originality/value – This paper is original in that it is the first to provide a financial markets-oriented empirical investigation of the “born-global” phenomenon using a sample of newly public American firms.
Globalization, International business, Multinational companies, United States of America
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