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Innovation Imprinting: Why Some Firms Beat the Post-IPO Innovation Slump


Journal of Marketing



Authors / Editors

Wies S;Moorman C;Chandy R K


Publication Year



Growth and innovation are primary arguments for firms seeking to go public and access resources from the stock market. So it is poignant that going public is, for a majority of firms, associated with a pronounced slump in breakthrough innovation. This paper proposes an actionable, marketing-related explanation for why some firms that go public manage to beat the post-IPO innovation slump: innovation imprinting. The paper argues and demonstrates that those firms that engage in innovation imprinting before they go public attract a segment of concordant investors whose risk preferences are more supportive of breakthrough innovation than investors at large. These investors, in turn, reward the firms’ continued introduction of breakthrough innovations after they have gone public. By analyzing the innovation patterns of 207 firms in the consumer-packaged goods sector before and after an IPO, we observe that one-third of firms are able to maintain or beat their pre-IPO levels of breakthrough innovations after going public. By studying their actions, the investors they attract, and their financial performance and survival rates, we provide empirical evidence for the importance of innovation imprinting and concordant investors in helping firms beat the post-IPO innovation slump.


Breakthrough Innovation; IPO; Marketing-Finance interface; Investors

Available on ECCH


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