CEO Education and the Ability to Raise Capital

Dimitrios Gounopoulos; George Loukopoulos; Panagiotis Loukopoulos

doi:10.1111/corg.12338

CEO Education and the Ability to Raise Capital

Dimitrios Gounopoulos, George Loukopoulos, Panagiotis Loukopoulos

Research output: Contribution to journal › Article › peer-review

Abstract

Using a unique hand-collected dataset, this study examines the role of Chief Executive Officer (CEO) educational attainments in relation to newly public firms.
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
Journal	Corporate Governance: An International Review
Early online date	13 Aug 2020
DOIs	https://doi.org/10.1111/corg.12338
Publication status	E-pub ahead of print - 13 Aug 2020

Keywords

Initial Public Offerings, Underpricing, CEO Education, Signaling, Post-IPO Performance

Access to Document

10.1111/corg.12338

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abstract = "Using a unique hand-collected dataset, this study examines the role of Chief Executive Officer (CEO) educational attainments in relation to newly public firms. 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.",

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