Director Experience and the Performance of IPOs: Evidence from Sweden

Thorsell, A., Isaksson, A., (2014). Director Experience and the Performance of IPOs: Evidence from Sweden. Australasian Accounting Business & Finance Journal 8(1),3-24

25 Pages Posted: 24 Mar 2017

See all articles by Anna Thorsell

Anna Thorsell

Umeå University

Anders Isaksson

Chalmers University of Technology

Date Written: 2014

Abstract

An initial public offering (IPO) represents one of the final stages in the life of a small firm as it transitions from private to public. In this paper the experience of directors is examined to determine the extent of the role they play in ensuring a successful listing. Unique data from 122 IPOs on the Swedish Stock Exchange have been examined in a search for the effect of director experience on aftermarket performance. Specific aspects of director experience within a board, such as interlocking directorships and average tenure, are connected to the underpricing of Swedish IPOs. Contrary to expectations, no statistically significant relationship was found between long-run aftermarket performance and director experience at the time of an IPO. This suggests that the previous experience of directors, as measured in earlier studies, is less relevant to long-term aftermarket performance in Sweden compared to other countries studied in the literature review. This emphasises the importance of examining different institutional contexts.

Keywords: Initial Public Offerings, IPO, The Board of Directors, Corporate Governance, Underpricing, Aftermarket Performance, venture capital

JEL Classification: L26, G34

Suggested Citation

Thorsell, Anna and Isaksson, Anders, Director Experience and the Performance of IPOs: Evidence from Sweden (2014). Thorsell, A., Isaksson, A., (2014). Director Experience and the Performance of IPOs: Evidence from Sweden. Australasian Accounting Business & Finance Journal 8(1),3-24, Available at SSRN: https://ssrn.com/abstract=2939594

Anna Thorsell

Umeå University ( email )

Samhallsvetarhuset, Plan 2
Umea University
Umeå, SE 901 87
Sweden

Anders Isaksson (Contact Author)

Chalmers University of Technology ( email )

Gothenburg
SE-412 96 Goteborg
Sweden

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
241
Abstract Views
1,028
Rank
252,674
PlumX Metrics