In the current study, we develop an institutional embeddedness explanation of foreign initial public offering (IPO) performance. To explain the performance differentials of these firms, we investigate the effects of both “home” and “host” country institutional signals on IPO underpricing using a sample of foreign IPOs listed in two different institutional environments, namely, the U.S. and U.K. stock exchanges. Supporting the view that signals are institutionally embedded and that their value is not universal, we find the salience of signals associated with country of origin is contingent on the institutional environment of the listing exchange.