The impact of initial public offerings on SMEs’ foreign investment decisions

Abstract This study aims to bridge the research on internationalization of small- and medium-sized enterprises (SMEs) with literature initial public offerings (IPOs). It investigates how IPOs affect SMEs’ foreign investment decisions as they internationalize. We argue that enable SMEs engage in a period accelerated expansion, resulting wave-like pattern, suggested by Håkanson Kappen’s (J Int Bus Stud 48(9):1103–1113, 2017) ‘Casino model’ internationalization. also propose there will be post-IPO shift entering less familiar locations towards taking higher ownership stakes new subsidiaries. use difference-in-differences design combined coarsened exact matching isolate effects IPOs. Our analysis overseas investments matched sample newly listed Japanese manufacturing their private counterparts provides strong evidence accelerate pace establishing subsidiaries after going public. The results reveal nuanced changes location patterns period. identifies IPO significant antecedent SME expansion offers explanation for intertemporal variance pace, direction, commitment process.