Investors response to different dimensions of entrepreneurial orientation

Purpose Leveraging signalling theory and institutional environment theory, this study aims to examine how the entrepreneurial orientation of emerging market firms impacts initial public offering (IPO) performance. Design/methodology/approach The authors conduct regression analysis based on archival data from 312 firms’ IPOs in India. Findings The results in the Indian context suggest it differs from IPO performance in developed markets. In an emerging market context, the findings suggest that only competitive aggressiveness is valued by investors in IPOs. The findings further show that proactiveness and autonomy negatively influence IPO underpricing. Research limitations/implications The research propositions imply that, owing to institutional voids in emerging markets, investors’ risk propensity and, hence, rewarding a firm’s entrepreneurial orientation differ from those in developed markets. Originality/value Extant literature has given limited attention to the dynamics of entrepreneurial orientation and the effect of each dimension of entrepreneurial orientation on IPO performance in emerging markets.