Does Corporate Governance Affect the Valuation of Spanish IPOs? The Role of Ownership Structure and the Board of Directors

Forthcoming, Spanish Journal of Finance and Accounting

42 Pages Posted: 19 Jan 2018

See all articles by Susana Alvarez

Susana Alvarez

Universidad de Oviedo - Business Administration

Félix J. López-Iturriaga

Universidad de Valladolid - Department of Finance and Accounting; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Date Written: January 12, 2018

Abstract

We analyse the influence of the board of directors and ownership structure on the valuation of IPOs in the Spanish capital market during the period 1998-2013. After controlling for other influences such as the auditor’s reputation, the underwriter’s reputation and the level of information asymmetry, our results lend strong support for the hypothesis of the influence exerted by ownership concentration over the level of IPO underpricing. Moreover, we find a non-linear relationship between the proportion of shares in the IPO belonging to members of the board of directors and the level of underpricing. Other IPO and firm characteristics such as the size of the offer and its structure also prove to be statistically significant. Finally, we find that the market cycle influences the valuation of IPOs, as the relationship between the market return and the initial IPO return is positive and statistically significant.

Keywords: Corporate Governance, Board of Directors, Ownership Structure, Pricing, IPOs (Initial Public Offerings)

JEL Classification: D73, G30, H11, H26

Suggested Citation

Alvarez Otero, Susana and Lopez-Iturriaga, Felix Javier, Does Corporate Governance Affect the Valuation of Spanish IPOs? The Role of Ownership Structure and the Board of Directors (January 12, 2018). Forthcoming, Spanish Journal of Finance and Accounting. Available at SSRN: https://ssrn.com/abstract=3101053

Susana Alvarez Otero (Contact Author)

Universidad de Oviedo - Business Administration ( email )

Avenida del Cristo s/n
33071-Oviedo
Asturias
Spain
+34 985102820 (Phone)
+34 985103708 (Fax)

Felix Javier Lopez-Iturriaga

Universidad de Valladolid - Department of Finance and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain
+34 983 184 395 (Phone)
+34 983 183830 (Fax)

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

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