31
have
better
access
to
investment
capital,
since
they
are
most
likely
to
be backed
up by informed
investor,
hence
reducing
information
asymmetry
(Bhabra
& Pettway,
2003).
The
size
and
the
amount
of
capital
that
the
firm
needs
to
gain
could
be
an
indicator
that
they
are
aiming
to
reduce
the
information
asymmetry,
which
might
affect
their
decision between the marketing methods.
2.1.8.2 Age of The Firms
A firm’s age is an indicator of how long the company has been
operating
prior
to its IPO.
It shows
how
long
the company
has
survived.
This
length
of
time
that
companies
have
managed
to
conduct
their
businesses
for
a long
time,
for
example,
is
also
an
indication
that
the company
has been able
to run
their operations
with
some
success.
The
older
the
company
is,
the
higher-level
quality
of
their
management,
these
factors
are also
able
to
increase
the
value
of
the issue pre and post-IPO.
When
a company
decided
to go public,
it is important
to take notes
on
how
long
the
company
has
been
operating.
For
young
and
smaller
firms,
they
are
more
likely
to
suffer
a
higher
degree
of
informational
asymmetry
than
an
older
company
(Chemmanur
&
Paeglis,
2004).
A
mature
firm
with
high
quality
management
and
reputation
could
appoint
a
reputable
underwriter,
and
given
the
quality
of
management
certification,
it could
lower
the
cost
of
acquiring
and
transmitting
information
(Chemmanur
&
Paeglis, 2004).
 |