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Innovation is a key driver of a firm’s ability to survive in the financial market. Previous studies typically consider a firm dead once its shares are delisted from the stock exchange. Despite its negative connotation, delisting may be a strategic decision and therefore be a positive outcome for the company. We study how a firm’s innovative activity, in terms of R&D investments and number of patents, shapes its survival profile, taking into account the heterogeneous nature of delistings. Using a sample of high-tech small and medium enterprises (SMEs) going public in Europe during 1998–2003, we find that more innovative firms, both in terms of patents and R&D investments, have a higher probability to be taken over. However, while firms with a rich portfolio of patents are less likely to voluntarily delist, higher R&D investments increase a firm’s likelihood of being delisted due to compliance failure.

The purpose of this paper is to relate the fees paid to IPO underwriters to the nature and quality of the services they provide.

Controlling for the characteristics of the firm going public, the risk associated with the offering, and the reputation of the underwriter, the authors study on a sample of Italian IPOs whether a formal commitment by underwriters to provide ancillary services allows them to charge higher fees.

The authors document that asking underwriters to stabilize stock price is costly to the issuer, while to support liquidity is not. The authors’ also show that underwriters stabilize IPOs that really need it, whereas the provision of liquidity support does not seem to be always aligned with the issuer’s interest.

Investigating the Italian underwriting market is instructive for two main reasons. First, the institutional setting in IPOs is similar to most continental European countries, but significantly different from the US market. For instance, allocation policies in US IPOs are discretionary for both retail and institutional investors, while in Europe shares cannot be discretionarily allocated to retail investors. Second, the Italian market offers the opportunity to study the going-public decision outside the typical Anglo-Saxon financial systems. This is of interest because while both the UK and the USA have well-developed equity markets and a related industry of financial intermediation centered on providing equity, our analysis sheds light on financial intermediation of IPOs in a bank-centered system.

The purpose of this paper is to contribute to the literature on the valuation of initial public offerings (IPOs). In particular, it tests the presence of over‐optimism when pricing IPOs on the Italian Nuovo Mercato.

The paper investigates whether the analysts make systematic errors when forecasting the performance of the firm undergoing the IPO by comparing analysts’ ex‐ante expectations to actual ex‐post figures. Using a sample of pre‐IPO analysts’ reports, the paper performs a regression analysis using the forecast errors (FE) of post‐issue sales as dependent variable in order to find out the determinants of mis‐valuation.

It is found that the Nuovo Mercato has been essentially a “market for projects” in which young enterprises endowed with a few tangible assets sold their business plans to the market exploiting high‐growth opportunities. In the aftermarket, stock and operating performances are found to be declining, falling short of initial expectations. The extent of the actual post‐issue growth was lower than the ex‐ante estimations by financial analysts, whose valuations were systematically upwardly biased. Affiliated analysts are found not to be more over‐optimistic than the unaffiliated. FE appear to be primarily driven by the extent of forecasted growth, by market sentiment and (inversely) by the size of the firm.

From the perspective of investors, this study contributes to the understanding of the helpfulness and limits of the analysts’ forecasts in investment decisions and, more generally, of the determinants of over‐optimism. This study addresses the issue of over‐optimism and provides empirical evidence of it. This paper also contributes to the literature on the rise and fall of the new European stock markets.

In this chapter we study the peer comparable approach used for the valuation of companies that went public on the Italian Nuovo Mercato. In Italy, IPO prospectuses often report the valuation methods used by investment banks. This allows us to analyze the accuracy of “real-world” valuation estimates. We show that underwriters rely on price-to-book and price-earnings multiples. The valuation estimates generated by these multiples are closest to offer prices. Conversely, when using enterprise value ratios comparable firms’ multiples are typically higher than those of the firms going public. We argue that underwriters have the possibility to select comparables that make their valuations look conservative.

With the opening of the Nouveau Marché in France in 1996, followed by the Neuer Markt in Germany in 1997 and the Nuovo Mercato in Italy in 1999, the opportunities for small companies to obtain a listing on European exchanges were growing rapidly. Other European countries with new stock markets included Belgium, Denmark, Finland, Greece, Ireland, the Netherlands, Poland, Portugal, Spain, Sweden and Switzerland. These stock markets had one common aim – to attract early stage, innovative and high-growth firms that would not have been viable candidates for public equity financing on the main markets of European stock exchanges. Of these new markets, the Neuer Markt emerged as Europe’s answer to NASDAQ.

This paper aims to present an insightful interview with Professor David Ahlstrom, a distinguished scholar in the field of entrepreneurship and management in emerging economies.

The interview explores Professor Ahlstrom’s extensive research on the dynamics of emerging economies, institutional theory, corporate governance, China’s early economic takeoff and the dissemination of management knowledge.

Drawing upon his prolific body of work, the discussion delves into how businesses navigate the complexities of globalization, adapt to institutional pressures and innovate within the constraints and opportunities presented by emerging economies, particularly during their reform process. Professor Ahlstrom shares his perspectives on the evolution of corporate governance practices, international business in turbulent environments and the pivotal role of entrepreneurship in driving economic growth and innovation in China and other emerging economies. Furthermore, he reflects on the challenges and rewards of scholarly publishing and the vital importance of management education in shaping future leaders and researchers.

Through his insights, Professor Ahlstrom not only elucidates the nuanced interplay between theory and practice in management but also offers valuable advice to aspiring scholars in the field. This paper aims to contribute to the ongoing dialogue on management research and practice in emerging economies, offering readers a comprehensive overview of key issues and future directions as seen through the lens of one of the field’s most respected voices.