Abstract
We find that Initial Public Offering (IPO) firms led by CEOs with superior educational credentials — in terms of level and quality — are associated with lower levels of IPO underpricing. This association is mainly driven by CEOs that hold advanced degrees. Notably, a difference-in-difference approach based on two quasi-natural experiments indicates that the impact of CEO education on IPO underpricing is more pronounced within environments characterized by lower information transparency. The baseline results also hold in the longer term, thereby confirming the value of signaling prestigious academic awards at the time of the IPO.
| Original language | English |
|---|---|
| Pages (from-to) | 67-99 |
| Number of pages | 33 |
| Journal | Corporate Governance: An International Review |
| Volume | 29 |
| Issue number | 1 |
| Early online date | 21 Sept 2020 |
| DOIs | |
| Publication status | Published - 27 Jan 2021 |
Funding
We are grateful to the Editor in Chief Konstantinos Stathopoulos, the Associate Editor Chris Florackis, two anonymous referees, and to Carol Alexander, Alex Butler, Konstantinos Bozos, Charlie Cai, Gonul Colak, Alan Collins, Francesca Cornelli, John Forker, Tim Jenkinson, Kevin Keasey, Paul McGuinness, Roni Michaely, Raghu Rau, Steve Toms, Francesco Vallascas, Silvio Vismara, Ansgar Wohlschegel, seminar participants at the University of Leeds, University of Portsmouth, University of Strathclyde, and the University of Sussex, as well as participants at the British Academy of Management, Financial Management Conference and the British Accounting and Finance Association and European Accounting Association Annual Meetings, for their helpful comments and suggestions. We also thank Jay Ritter for providing the Carter?Manaster rankings and each IPO firm's founding date on his website.
Keywords
- Initial Public Offerings, Underpricing, CEO Education, Signaling, Post-IPO Performance