Department of Finance and Decision Sciences
This study investigates the effect of corporate governance factors on the underpricing of initial public offerings (IPOs) in Hong Kong, and the results show that this effect is significant. IPOs are categorized into four subgroups based on the role of the founder: (1) no-founder firms (companies with no specific founder), (2) pure-founder firms (companies whose founder is neither the company’s chairman of the board nor its CEO), (3) founder-chairman/CEO firms (companies whose founder is either the company’s chairman of the board or its CEO) and (4) founder-chairman-CEO firms (companies whose founder is the chairman and CEO). The results demonstrate a significant descending pattern for the underpricing level of the four subgroups, which can be explained by the varying incentive and behaviour mechanisms that result from the various founder identities.
Family firms, IPO underpricing, corporate governance, board of directors, Hong Kong
Source Publication Title
Taylor & Francis
This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics in May 2017, available online: http://www.tandfonline.com/10.1080/00036846.2017.1340577.
Dai acknowledges financial support from the China Postdoctoral Science Foundation (Grant No. 2016M592322) and financial support from Research Centre of Low-carbon Economy for Guangzhou Region, Jinan University.
Link to Publisher's Edition
Cheung, Y., Dai, Y., Ouyang, Z., & Tan, W. (2018). Who leaves money on the table? The role of founder identity in Hong Kong. Applied Economics, 50 (7), 774-788. https://doi.org/10.1080/00036846.2017.1340577