What is it about?
This paper examines how a company’s trademarks, meaning its brands, affect its success when going public through an IPO. Using data from more than 2,000 U.S. IPOs, the authors find that firms with stronger and more valuable trademarks tend to see higher investor demand on their first day of trading, which shows up as bigger first day jumps in stock price. These effects are especially strong for service companies where reputation matters more than physical products. The study also shows that strong trademarks help companies after the IPO because they attract venture capital and institutional investors, perform better in the stock market, raise more money later, and are less likely to drop out of the market. In short, the research highlights that brands and trademarks are not just marketing tools but also powerful financial assets that shape how companies are valued when they go public and beyond.
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Why is it important?
This research is important because it shows that trademarks, often overlooked in financial reporting, play a critical role in how companies are valued and supported by investors. As most modern companies rely heavily on intangible assets, such as brand reputation, rather than physical property, understanding the impact of trademarks helps explain why some firms perform better when they go public. Investors, managers, and policymakers can benefit from recognizing trademarks as signals of quality and growth potential. For companies, this means that building and protecting strong brands is not only a marketing strategy but also a key financial strategy that can attract investment, improve long term performance, and increase survival in the competitive public market.
Perspectives
This paper explores how trademarks, which reflect the strength and value of a company’s brands, influence success when going public through an IPO. It shows that firms with valuable trademarks experience stronger investor demand, better market performance, and greater ability to raise money after listing. This is important because it highlights that in today’s economy, where intangible assets drive much of a firm’s value, trademarks serve as more than legal protections or marketing tools. They act as signals of quality that attract sophisticated investors, shape stock market outcomes, and help companies survive and grow after going public. Understanding this link matters for business leaders seeking to strengthen their market position, for investors assessing firm quality, and for policymakers considering how intangible assets should be recognized in financial markets.
Dr. Dimitrios Konstantios
Alba Graduate Business School, The American College of Greece
Read the Original
This page is a summary of: The role of trademarks in going public, The British Accounting Review, August 2025, Elsevier,
DOI: 10.1016/j.bar.2025.101734.
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