Gaia Marchisio

Going Public and the Enrichment of a Supportive Network

Past research on initial public offerings suggests that the reputation of a company positively affects the success of the offering. Success is usually measured in financial terms as if the essence of the operation lay only in the short-term inflow of money. In this paper, we investigate important albeit often neglected implications of going public by combining evidence from a series of preliminary case studies taken from the results of a survey of 57 Italian initial public offerings. Evidence from our research suggests that, besides providing an important inflow of capital, going public may actually improve the reputational and social capital of a company, by increasing its visibility, prestige and perceived trustworthiness. Therefore, going public may be an important way to support entrepreneurial activity, as it may expand and reinforce the network of relationships that offer access to external resources, complementary skills and investment opportunities.

Family Firms and the Decision to Go Public: A Study of Italian IPOs

Past studies on public equity capital options concentrated on the financial or the institutional side of the process. The finance literature considered going public mainly as a way to access new sources of funds and to decrease the cost of capital. Within the family business field, most scholars focused on the benefits of going public for family succession and the survival of the firm after the founder. Although some scholars suggest that going public may have also an important strategic rationale, the hypothesis has not been subject to extensive empirical research. In this paper, combining evidence from a comparative case study and an extensive survey of recent Italian IPOs, we investigate the consequences of going public for the capacity of the companies to build and sustain competitive advantage, through an increase in their reputational and social capital.

The Role of Going Public in Family Businesses' Long-Lasting Growth: A Study of Italian IPOs

This research note investigates how going public affects the capacity of companies to pursue growth and profitability in the long run. It combines the results of transversal and longitudinal analyses of two databases of fast-growing Italian companies and IPOs and compares the results with nonfamilyowned businesses that went public during the same period. Studies of companies growth show two main reasons for growth: external causes due to evolution in progress in the competitive environment and internal causes brought about by management ambitions. In either case, growth provides companies with three main advantages: the ability to increase value, higher market shares, and increased productivity. Italian empirical research shows the great difficulties that both small and large companies have growing. It is estimated that most companies, especially small ones, are family owned. The literature shows that family-owned companies face particular obstacles and that the IPO appears to provide them with some advantages.

Fostering Entrepreneurship in Established Family Firms

Individual commitment-related factors are examined in determining entrepreneurial behavior in family firms. Three contributions to entrepreneurial scholarship on family firms are offered. First, a survey based on 1,233 family firms provides a broad, general picture of both individual- and organizational-level antecedents of entrepreneurial activities in these firms. Second, the survey reveals three different types of family firms—founder-based, sibling/cousin consortium, and open family firms. Third, analysis based on four follow-up case studies shows some of the processes through which upbringing, education, previous professional experience, and individual motivation may promote values that are more directly related to entrepreneurial orientation in active family members. Conclusions indicate that individual characteristics are crucial as preconditions for entrepreneurial behavior—these are the raw materials with which an entrepreneurial personality can be created. Respondents to the surveys confirmed the importance of developing managerial and leadership skills through work experience—i.e., it was easier to gain the necessary knowledge about the company and the industry through direct contact with the business. (JSD)

Family Business as Viewed by Financial Intermediaries

Family businesses play an important role in Italy and comprise not just small firms, but large ones as well. The entrepreneurial family is defined as a group of descendants from a family founder who own shares in a company within the manufacturing, commercial, or service industry. A taxonomy of structural variables can be used to classify entrepreneurial families: characteristics of family members, net worth, and controlled company. Social variables, such as family internal cohesion, leadership nature, financial culture, risk propensity, and lifestyle can be used to understand the decision processes employed by entrepreneurial families.Current trends in Italian entrepreneurial families include a high number of successions from one generation to the next, partnership re-structuring due to multiple shareholders of a company, and competitive dynamics due to the pressures of business growth. Specific requirements of the entrepreneurial family are derived from the trends and variables previously discussed. These are: the need to increase total net worth, the need to manage net worth, and the need to preserve net worth over the course of time. Individuals who provide entrepreneurial families with the products and services needed to run successful ventures include third actors, particularly financial intermediaries. However, due to conflicts of interest between entrepreneurial families and financial intermediaries, some businesses choose to employ family office services for financial guidance. (NEE)