Avoiding the Post-IPO Brewing Storm of Delisting: M&As and Investing Internally in Turbulence

Using novel data on 4,350 newly-public firms, we expect to and empirically find that newly-public firms that carefully balance their portfolio of internal development and acquisitions projects are less likely to be delisted than those that over-rely either on organic growth or acquisitive growth. Contrary to what we hypothesized not only investing internally but also pursuing M&As help mitigate the increasing hazard rate of delisting due to environmental turbulence. Surprisingly, firms which follow a conservative investment policy under external turbulence are least likely to survive. While, increased hazard of delisting due to internal turbulence is dampened for acquisitive firms, it is amplified for firms pursuing organic investments.