EXPRESS: Temporal Patterns of New Product Introductions and IPO Value: The Importance of Recency, Dispersion, and Asymmetry

Abstract

A firm’s innovation activity is often judged by the number and type of new products it launches, but when these products are introduced may be equally important, especially before going public. This research investigates how the temporal pattern of new product introductions (NPIs) influences a firm’s initial public offering (IPO) value. The analysis uses data from 298 firms that went public between 2006 and 2023, and focuses on three patterns of timing: recency (how recently the latest product was launched before the IPO), dispersion (the degree to which NPIs before the IPO are spread out over time), and asymmetry (how disproportionately NPIs were launched over time before the IPO). Results demonstrate that firms with more dispersed NPIs achieve higher IPO value, whereas firms that introduce a product just before the IPO or introduce several new products disproportionately closer to the IPO tend to perform worse. Findings show that 1% increases in recency, dispersion, or asymmetry result in a 1.34% decrease, 3.65% increase, and 1.03% decrease, respectively, in IPO value, and these vary depending on the firm’s industry growth and product innovativeness. Results provide new insights for theory and practice, highlighting that innovation timing is a key determinant of IPO performance.