Foreign IPOs in the U.S.: When entrepreneurial orientation meets institutional distance

An increasing number of foreign firms are seeking capital in foreign countries via IPO listings. While much research has discussed the effects of external institutions, few research studies have systematically analyzed how institutional factors, as well as firm-specific characteristics such as entrepreneurial orientation (EO), jointly determine the performance of foreign IPOs. We suggest that a larger administrative distance negatively affects IPO performance, whereas EO positively affects IPO performance. At the same time, administrative distance negatively moderates the effects of EO on IPO performance. Findings from a sample of foreign firms that went public on the U.S. stock market between 2002 and 2012 support our hypotheses. The implications of these findings are discussed in this paper.