CROSSED WIRES: ENDORSEMENT SIGNALS AND THE EFFECTS OF IPO FIRM DELISTINGS ON VENTURE CAPITALISTS' REPUTATIONS

• 成果类型: Article
• 署名作者: Gomulya, David; Jin, Kyuho; Lee, Peggy M.; Pollock, Timothy G.
• 署名单位: Singapore Management University; Gwangju Institute of Science & Technology (GIST); Arizona State University; Arizona State University-Tempe; University of Tennessee System; University of Tennessee Knoxville
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/amj.2016.0796
• 发表日期: 2019
• 页码: 641-666
• 关键词: initial public offerings; ORGANIZATIONAL REPUTATION; decision-making; dynamic-models; management; POWER; performance; investors; MARKET; specification

摘要

Signaling theorists have paid a great deal of attention to the costs of acquiring characteristics that can serve as signals, such as endorsements from reputable third parties. However, limited attention has been devoted to the penalty costs associated with providing inaccurate signals and the factors that can exacerbate or attenuate the penalties. We examine the effect of negative feedback loops on venture capital (VC) firms' reputations that result from the failures (delistings) of the newly public firms they once endorsed. Drawing on signaling and attribution theories, we argue that endorsements by reputable VC firms create high expectations that, when violated, cause stakeholders to look for scapegoats, resulting in reputational damage to the endorsing VCs. We find empirical support for this argument, and for the attenuating effect of both post-IPO market performance and survival. Our study contributes to the conversation about endorsements as signals, and empirically tests the implicit assumption that endorsements place the reputation of the endorser at risk.