How investors evaluate firm entrepreneurial orientation? Empirical evidences from alternative investment market

The aim of this paper is to investigate the relationship between firm performances after the IPO and their entrepreneurial orientation (EO). In our work we want to test if more entrepreneurial oriented firms show better market performances signalling that investors valuate it positively. To this purpose, we focus on a particular sample of entrepreneurial firms, i.e. companies that went public on the Alternative Investment Market (AIM) through IPO during the period from 1995 to 2006. Along the lines of Miller (1983), Covin and Slevin (1991) and Lunpkin and Dess (1996), firms' entrepreneurial orientation is measured in terms of risk taking, innovation and proactivity. Following the literature in management on investor valuation we use the percent price premium as dependent variable of our model. Our results confirm a positive impact of risk-taking and proactivity on investors' valuation.