A firm’s EO is a result of its combined innovativeness, risk-taking, proactiveness, competitive aggressiveness, and autonomy (Lumpkin & Dess, 1996; Miller, 1983). Studies point to a number of positive outcomes that firms derive because of their EO, however, these results primarily pertain to the firm’s internal operations and employees. Our study, in contrast, investigates whether EO helps firms acquire external resources.

An initial public offering (IPO) is a critical point in the life of a firm because successful IPOs depend upon convincing investors to contribute large amounts of equity capital to support a firm’s growth strategies. However, IPOs are characterized by information asymmetries between company insiders and outsiders (Anderson, Beard, and Born, 1995). In this study we investigate whether communications that convey information pertaining to a firm’s EO enhances the legitimacy of IPOs with potential investors.