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.
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 Sep 2020 |
| DOIs | |
| Publication status | Published - 27 Jan 2021 |
Keywords
- Initial Public Offerings, Underpricing, CEO Education, Signaling, Post-IPO Performance