IPO survival and CEOs’ decision-making power: The evidence of China

Eilnaz Kashefi Pour

doi:10.1016/j.ribaf.2014.10.003

IPO survival and CEOs’ decision-making power: The evidence of China

Eilnaz Kashefi Pour

Finance

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Abstract

This research examines the impact of a CEO's (Chief Executive Officer) decision-making power on a firm's survival after an initial public offering (IPO), using data from the period 2001–2011 in China. Following the CEO literature which argues that CEO traits are related to a firm's performance, I find that the CEO who has power over the board as a consequence of her/his status as a founder decreases the probability of delisting, whereas her/his status as the board's sole insider and concentration of the title in the hands of the CEO increases the likelihood of delisting. Moreover, the results suggests that firms with higher CEO ownership power, older, more industry experience, and highly educated CEOs, and with those who have the same nationality as the company, are more likely to survive after taking IPOs, but that firms with CEOs who also chair their boards are less likely to survive. The results also show that firms with powerful CEOs generate negative announcement date excess returns.

Original language	English
Pages (from-to)	247-267
Number of pages	21
Journal	Research in International Business and Finance
Volume	33
Early online date	22 Oct 2014
DOIs	https://doi.org/10.1016/j.ribaf.2014.10.003
Publication status	Published - 1 Jan 2015

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10.1016/j.ribaf.2014.10.003

Kashefi_Pour_IPO_survival_CEOs_Research_International_Business_Finance_2014
NOTICE: this is the author’s version of a work that was accepted for publication in Research in International Business and Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research in International Business and Finance, Vol 33, January 2015, DOI: 10.1016/j.ribaf.2014.10.003. Eligibility for repository checked March 2015
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title = "IPO survival and CEOs{\textquoteright} decision-making power: The evidence of China",

abstract = "This research examines the impact of a CEO's (Chief Executive Officer) decision-making power on a firm's survival after an initial public offering (IPO), using data from the period 2001–2011 in China. Following the CEO literature which argues that CEO traits are related to a firm's performance, I find that the CEO who has power over the board as a consequence of her/his status as a founder decreases the probability of delisting, whereas her/his status as the board's sole insider and concentration of the title in the hands of the CEO increases the likelihood of delisting. Moreover, the results suggests that firms with higher CEO ownership power, older, more industry experience, and highly educated CEOs, and with those who have the same nationality as the company, are more likely to survive after taking IPOs, but that firms with CEOs who also chair their boards are less likely to survive. The results also show that firms with powerful CEOs generate negative announcement date excess returns.",

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IPO survival and CEOs’ decision-making power: The evidence of China

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