While accumulated studies have shown that human and social capital help young IPO firms increase legitimacy and obtain higher valuation, few studies have investigated whether the context impacts IPO valuation. It is our contention that greater environmental munificence allows the IPO firm to leverage higher human and social capital (as the IPO firm begins to compete against more established competitors). On the other hand, lower environmental munificence will make it difficult to capitalize on the human and social capital (particularly given the IPO firms’ nascence). As such, we believe that high human and social capital will have a direct positive impact on valuation and the environmental context will moderate the impact of this human and social capital.
Cho, Sam Yul; Arthurs, Jonathan; Nam, Daeil; Lee, Sangyoun; and Juasrikul, Sakdipon
"THE INFLUENCE OF ENVIRONMENTAL MUNIFICENCE ON THE VALUE OF BOARD HUMAN AND SOCIAL CAPITAL IN IPOS (INTERACTIVE PAPER),"
Frontiers of Entrepreneurship Research: Vol. 33
, Article 6.
Available at: http://digitalknowledge.babson.edu/fer/vol33/iss10/6