Corporate culture and IPOs

Abstract

This study documents corporate culture at the time of initial public offering (IPO) and the relationship between corporate culture at the time of IPO and firm financial performance. Based on a sample of 1157 US firms that went public between 1996 and 2011 and performance information through 2016, the data provide strong evidence that regional culture, industry characteristics, and pre-IPO financing play key roles in explaining a firm's cultural orientation. Moreover, the data indicate that IPO firms with a highly competition- and creation-oriented culture experience higher profitability and less risk of financial distress than other IPO firms.