Richard B. Carter

• Iowa State University

Recognizing the window of opportunity to go public for digital product and service (DPS) firms is especially critical because they have high fixed-to-variable cost (FCVC) ratios and winner-take-all industry competition. Too early and their very risky nature means a steep discount to their stock. Too late and they may not be able to sell stock or it...

We analyse reputational signals and decisions surrounding capital acquisition by examining 76 insurance firms going public from 1996 to 2006. We first explore the relationship between proxies for insurance firm reputation and initial public offering (IPO) underwriter reputation. In general, we find that more reputable underwriters market IPOs of mo...

This article reports and analyzes the results of a survey of the portfolio managers of 63 life insurance companies. The survey suggests that life insurers have been shifting from privately placed assets (e.g., mortgages) to those that are likely to be publicly traded (e.g., government securities) since 1980. Additionally, an analysis of the survey...

The first decade of the e-commerce era saw an increase in activity in the software development industries as new firms were created and existing firms made acquisitions. Many firms pursued a growth strategy and this growth required capital that was often obtained through an initial public offering (IPO) of equity. Software firm cost structures are...

We study 6,686 IPOs spanning the period 1981-2005 and find that the new issues puzzle disappears in a Fama-French three-factor framework. IPOs do not underperform in the aftermarket on a risk-adjusted basis and do not underperform a matched sample of non-issuers. IPO underperformance is concentrated in the 1980’s and early 1990’s, and IPO’s either...

We examine the long-term performance and characteristics of firms that went public from 1981 to 2005. We find that long-run returns declined and the proportion of failed and failing firms increased with underwriter reputation. The IPOs marketed by the more reputable underwriters were more likely to fail or be failing in the post-1980s period, but w...

The first decade of the e-commerce era saw an increase in activity in the software development industries as new firms were created and existing firms made acquisitions. Many firms pursued a growth strategy and this growth required capital that was often obtained through an initial public offering (IPO) of equity. Software firm cost structures are...

Faced with the prospect of positive and negative network externalities and the all-or-nothing phenomenon, digital product (DP) firms must choose the timing of their capital acquisitions carefully. Moreover, with typically high fixed-to-variable cost ratios, the risk to recovering the initial investment is critical. In this chapter the authors discu...

Using the end of the quiet period (QPX) after an IPO as a venue for testing, we examine the long-run predictive ability of analysts and the market. Not only do we find that the analysts are reasonably good at predicting returns for at least a year, we also find that the market in general is at least as good--even after adjusting for the analysts' r...

In this research we provide evidence on small firm owners' attitudes and approaches to capital acquisition. The most surprising finding is their general dissatisfaction with the capital acquisition process. Yet we found no evidence that this dissatisfaction translates into poor performance. Our analysis indicates that male-owned businesses were old...

From the results of a survey we compare the demographics and potential problem situations of 57 bankrupt firms to 55 nonbankrupt firms in an attempt to identify root causes of bankruptcy. Results indicate that the most serious problems of bankrupt firms can be condensed into three categories: lack of knowledge, inaccessibility to debt, and economic...

In this paper we present the results of a regional survey of small business entrepreneurs that asked about the use of and motivation for bootstrap financing – employing resources other than traditional financing to fund operations. Extending the work of Winborg and Landstrom (2000) our results indicate that perceived risk is highly associated with...

In this study we compare the after-market trading and market making activities of a sample of Nasdaq online initial public offerings (IPOs) to a matched sample of traditional IPOs. We find that online IPOs have significantly higher turnover in after-market trading, and more market makers, dealers, and electronic communications networks servicing th...

In the past few years, there has been a growth in Internet markets run by online investment bankers, where companies and investors can buy and sell initial public offerings (IPOs) of corporate stock. In this study, we confine our examination to the first of what we anticipate will be several phases in the evolution of Internet IPOs: the online dist...

When companies are considering an IPO they must first evaluate the financial issues to decide whether it is a viable financing option, and second they must identify which channel(s) they wish to use to distribute the IPO. In this article we focus on the second decision.

: Do managed care health plans truly control costs more effectively than nonmanaged care plans? Recent evidence suggests that employees are getting used to the managed care idea and that managed care is responsible for the sharp slowdown in health-care costs. This article examines recent changes in the delivery, financing, and consumption of health...

Numerous studies have documented an inverse relationship between the reputation of the lead underwriter of an initial public offering and the IPO's initial return. Contrary to this evidence, we find a positive relationship between the underwriter's reputation and the initial return for a more recent sample of IPOs from the 1990's. Closer examinatio...

In the past few years Internet-based investment banks have emerged that provide companies with another sales channel for selling their stock through initial public offerings (IPOs). In this study we address two research issues related to these new intermediaries. First, what are the characteristics of firms that choose online (Internet-based) inves...

Insider ownership and antitakeover provisions both affect a firm's vulnerability to takeover, its value, and its managers' incentives and utility. We examine the simultaneous determination of insider ownership and takeover protection using data from mutual savings and loan associations converting to stock form. At low levels of insider ownership, w...

We find that the underperformance of IPO stocks relative to the market over a three-year holding period is less severe for IPOs handled by more prestigious underwriters. Consistent with prior studies, we also find that IPOs managed by more reputable underwriters are associated with less short-run underpricing. Among the various existing proxies for...

Previous research concludes that companies with an established bank borrowing relationship receive certification benefits. Evidence from initial public offerings (IPOs) suggests that certification signals low risk and results in less run-up in price after the offering than firms with no certification. However, recent research implies that firms als...

As the health care industry evolves, communities will be faced with the choice of ownership structure for their local hospitals. Unfortunately, the evidence concerning which structure is most efficient, proprietary or non-proprietary, is mixed (e.g., Sloan and Vraciu 1983, pp. 25–37 and Clarkson 1972, pp. 374–377). Many of these studies, however, h...

In this research, we examine the relationship between the reputation of investment banks and the investor clientele to whom they market initial public offers. We hypothesize that the most reputable investment banks have considerable distribution power but confine initial public offer sales to investors with long-term horizons in an effort to mainta...

This paper examines the after-market for initial public offerings (IPOs), particularly the security valuation effects of structural differences in available information. There is a diversity of information among issuing firms at the time of their offering and particularly under certain market conditions. Because this diversity decreases with time a...

Canonical correlation analysis is used to investigate the cross-balance sheet relationships for a sample of Mexican firms. The results are compared to a similar analysis of large and small United States firms. Like US companies, Mexican firms tend to match the maturities of short- and long-term assets with their liability/equity accounts. Unlike th...

A recent examination of underwriter reputation and initial public offerings (IPOs) suggest that one of the reasons prestigious underwriters market low-risk IPOs is to increase the expected present value of subsequent offerings. There is a greater likelihood that a firm using low-risk IPOs will be a viable future operation with the potential for sub...

This paper empirically examines the explanatory power of investment banking reputation measures. One of these measures, a nineteen-tier indicator of underwriter reputation, is determined by the relative position of the underwriter's name within the tombstone announcements of security offerings. An alternative measure assigns four ranks according to...

This paper reports the findings of a survey of 172 home–based businesses located in the rural midwestern USA. The results indicate that, unlike US businesses in general, rural home–based businesses are primarily owned by females and are primarily sole proprietorships. The pre–dominant industry is the production of crafts. Personal savings account f...

Traditionally, financial theory has offered little guidance to managers who must choose whether to list their stock on an exchange or allow it to continue trading over-the-counter. Recent developments in market microstructure theory allow a more careful analysis of the exchange listing decision. Market microstructure theory implies that firms list...

Strategic planning for information systems is imperative for the survival of any organization given the dynamic and uncertain environments of contemporary organizations. In this paper, we demonstrate how an information systems plan can be successfully developed and implemented within an academic setting. During the planning process, we identified p...

We examine the relationship between management ownership and compensation for a sample of savings and loan associations which have recently converted to stock organizations. Previous expense preference literature has indicated that the stock form of organization lessens the potential for non-value-maximizing behavior that may be manifested in the p...

Demonstrates how an information systems plan can be successfully developed and implemented within an academic setting. Six guidelines for information systems planning are provided; problems are identified and recommendations to address the problems are suggested; and information systems objectives are discussed, including business communications, a...

This paper examined the returns earned by subscribing to initial public offerings of equity (IPOs). suggests that IPO returns are required by uninformed investors as compensation for the risk of trading against superior information. We show that IPOs with more informed investor capital require higher returns. The marketing underwriter's reputation...

This paper examined the returns earned by subscribing to initial public offerings of equity (IPOs). suggests that IPO returns are required by uninformed investors as compensation for the risk of trading against superior information. We show that IPOs with more informed investor capital require higher returns. The marketing underwriter's reputation...

This paper examined the returns earned by subscribing to initial public offerings of equity (IPOs). suggests that IPO returns are required by uninformed investors as compensation for the risk of trading against superior information. We show that IPOs with more informed investor capital require higher returns. The marketing underwriter's reputation...

Considerable discussion has surrounded the mutual versus the stock form of organizational structure for savings and loan associations (SLAs). Masulis (1987) found that conversion from a mutual to a stock organization yields abnormal returns for stockholders. The effect of conversion on management behavior, however, was not examined. In this study,...

This paper examines the returns earned by subscribing to initial public offerings of equity. K. Rock (1986) suggests that initial public offerings of equity returns are required by uninformed investors as compensation for the risk of trading against superior information. The authors show that initial public offerings of equity with more informed in...

Theory suggests that entrepreneurs’ private information about the likelihood of the success of their enterprise is revealed by their personal equity investment in the firm. This paper tests this argument using the occurrence and severity of the first year's financial difficulties as an indication of the entrepreneur's assessment of the likelihood o...

Thesis (Ph. D.)--Graduate School of Business, University of Utah, 1987. Includes bibliographical references (leaves [178]-181).