Abstract

http://ssrn.com/abstract=1253171
 
 

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When the Going Gets Tough: Board Capital and Survival of New Economy IPO Firms


Nongnit Chancharat


University of Wollongong

Chandrasekhar Krishnamurti


Auckland University of Technology

Gary Gang Tian


University of Wollongong

August 25, 2008

21st Australasian Finance and Banking Conference 2008 Paper

Abstract:     
This study investigates the influence of corporate governance attributes on the likelihood of survival for 127 new economy IPO companies that listed on the ASX between 1994 to 2002. We use survival analysis techniques utilizing the Cox proportional hazards model with three main categories of corporate governance attributes; a) board size, b) board independence and c) ownership concentration. We find that the survival time is negatively related to the percentage holdings of the top 20 shareholders. Our results also suggest that new economy IPO companies with low leverage and small company size are more likely to survive. However, the results indicate that board size and board independence do not explain the survival likelihood of new economy IPO firms. Our results suggest that corporate governance mechanisms that are designed specifically to protect minority shareholders and other providers of external capital are of little value during periods of extreme financial duress.

Number of Pages in PDF File: 33

Keywords: Corporate Governance, Survival Analysis, New Economy Sector, Initial Public Offerings

JEL Classification: G32, G33

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Date posted: August 25, 2008  

Suggested Citation

Chancharat, Nongnit and Krishnamurti, Chandrasekhar and Tian, Gary Gang, When the Going Gets Tough: Board Capital and Survival of New Economy IPO Firms (August 25, 2008). 21st Australasian Finance and Banking Conference 2008 Paper. Available at SSRN: http://ssrn.com/abstract=1253171 or http://dx.doi.org/10.2139/ssrn.1253171

Contact Information

Nongnit Chancharat
University of Wollongong ( email )
Australia
Chandrasekhar Krishnamurti
Auckland University of Technology ( email )
AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand
Gary Gang Tian (Contact Author)
University of Wollongong ( email )
Northfields Avenue
Wollongong, NSW 2522
Australia
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