Do CEOs with Financial Background Matter for the Success of Newly Public Firms?

Dimitrios Gounopoulos; Georgios Loukopoulos; Panagiotis Loukopoulos; Geoffrey Wood

doi:10.1111/jbfa.70019

Do CEOs with Financial Background Matter for the Success of Newly Public Firms?

Dimitrios Gounopoulos, Georgios Loukopoulos, Panagiotis Loukopoulos, Geoffrey Wood

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

Abstract

We uncover strong evidence that newly public firms run by financial expert chief executive officers (CEOs) have a lower probability of involuntary delisting and a longer survival time in the aftermarket. This result is robust to alternative definitions of long-term viability and endogeneity concerns. Our cross-sectional analysis reveals that the positive effect of financial expert CEOs on initial public offering (IPO) survival is more pronounced in large and complex firms but weaker in dynamic settings. Additional tests show that CEOs with a career background in finance gain better access to the primary equity market than other domain experts, as evidenced by a more efficient price discovery process and greater financial visibility in the aftermarket. Furthermore, these CEOs are associated with more efficient post-IPO outcomes which lie at the core of their skills set, such as capital expenditures and acquisitions, rather than research and development (R&D) projects, which are typically outside their domain of expertise.

Original language	English
Pages (from-to)	321-351
Number of pages	31
Journal	Journal of Business Finance and Accounting
Volume	53
Issue number	1
Early online date	29 Oct 2025
DOIs	https://doi.org/10.1111/jbfa.70019
Publication status	Published - 28 Feb 2026

Data Availability Statement

The data that support the findings of this study are available from WRDS and Refinitiv. Restrictions apply to the availability of these data, which were used under license for this study. Data are available from the author(s) with the permission of WRDS and Refinitiv

Acknowledgements

This article has greatly benefited from insights from Andreas Andrikopoulos, Panagiotis Asimakopoulos, Giovanni Calice, Thomas Chemmanur, Douglas Cumming, Claudia Custodio, Nadine Georgiou, Ranko Jelic, Luo Jianchuan, Andreas Kaeck, Ahmet Karpuz, Roni Michaely, Collins Ntim, Anita Pennathur, Klaus Schaeck, Andrew Stark, Onur Tosun (FMA Discussant), Andrew Urquhart, Petros Vourvachis, and Huainan Zhao, seminar participants at the Open University, University of Loughborough, University of Bath, and University of Strathclyde, and conference participants at the Financial Management Association (FMA, 2019) in New Orleans and Glasgow, European Accounting Association (EAA, 2019), British Accounting and Finance Association (BAFA, 2019), Young Finance Scholars Conference (YFS, 2019), and British Academy of Management (BAM) Corporate Governance Conference 2019. We would like to thank Donna Irving for the research assistance. We would also like to acknowledge that an earlier version of this article was circulated under the title “Do Financial Expert CEOs Matter for Newly Public Firms?”

Funding

This article has greatly benefited from insights from Andreas Andrikopoulos, Panagiotis Asimakopoulos, Giovanni Calice, Thomas Chemmanur, Douglas Cumming, Claudia Custodio, Nadine Georgiou, Ranko Jelic, Luo Jianchuan, Andreas Kaeck, Ahmet Karpuz, Roni Michaely, Collins Ntim, Anita Pennathur, Klaus Schaeck, Andrew Stark, Onur Tosun (FMA Discussant), Andrew Urquhart, Petros Vourvachis, and Huainan Zhao, seminar participants at the Open University, University of Loughborough, University of Bath, and University of Strathclyde, and conference participants at the Financial Management Association (FMA, 2019) in New Orleans and Glasgow, European Accounting Association (EAA, 2019), British Accounting and Finance Association (BAFA, 2019), Young Finance Scholars Conference (YFS, 2019), and British Academy of Management (BAM) Corporate Governance Conference 2019. We would like to thank Donna Irving for the research assistance. We would also like to acknowledge that an earlier version of this article was circulated under the title “Do Financial Expert CEOs Matter for Newly Public Firms?”

Funders	Funder number
British Academy of Management
University of Strathclyde
Petros Vourvachis
Loughborough University
British Accounting and Finance Association
Andrew Urquhart
Open University

Keywords

cognitive entrenchment
financial expert chief executive officers (CEOs)
initial public offering (IPO) survival
initial public offerings
post-initial public offering (IPO) performance
underpricing

ASJC Scopus subject areas

Accounting
Business, Management and Accounting (miscellaneous)
Finance

Access to Document

10.1111/jbfa.70019Licence: CC BY

Cite this

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title = "Do CEOs with Financial Background Matter for the Success of Newly Public Firms?",

abstract = "We uncover strong evidence that newly public firms run by financial expert chief executive officers (CEOs) have a lower probability of involuntary delisting and a longer survival time in the aftermarket. This result is robust to alternative definitions of long-term viability and endogeneity concerns. Our cross-sectional analysis reveals that the positive effect of financial expert CEOs on initial public offering (IPO) survival is more pronounced in large and complex firms but weaker in dynamic settings. Additional tests show that CEOs with a career background in finance gain better access to the primary equity market than other domain experts, as evidenced by a more efficient price discovery process and greater financial visibility in the aftermarket. Furthermore, these CEOs are associated with more efficient post-IPO outcomes which lie at the core of their skills set, such as capital expenditures and acquisitions, rather than research and development (R\&D) projects, which are typically outside their domain of expertise.",

keywords = "cognitive entrenchment, financial expert chief executive officers (CEOs), initial public offering (IPO) survival, initial public offerings, post-initial public offering (IPO) performance, underpricing",

author = "Dimitrios Gounopoulos and Georgios Loukopoulos and Panagiotis Loukopoulos and Geoffrey Wood",

year = "2026",

month = feb,

day = "28",

doi = "10.1111/jbfa.70019",

language = "English",

volume = "53",

pages = "321--351",

journal = "Journal of Business Finance and Accounting",

issn = "0306-686X",