CEO Education and the Ability to Raise Capital
Gounopoulos, D., Loukopoulos, G., and Loukopoulos, P. 2020. CEO Education and the Ability to Raise Capital. Corporate Governance: An International Review. doi: 10.1111/corg.12338
70 Pages Posted: 4 Jun 2019 Last revised: 24 Aug 2020
Date Written: August 13, 2020
We find that Initial Public Offering (IPO) firms led by CEOs with superior educational credentials — in terms of level and quality — are associated with lower levels of IPO underpricing. This association is mainly driven by CEOs that hold advanced degrees. Notably, a difference-in-difference approach based on two quasi-natural experiments indicates that the impact of CEO education on IPO underpricing is more pronounced within environments characterized by lower information transparency. The baseline results also hold in the longer term, thereby confirming the value of signaling prestigious academic awards at the time of the IPO.
Keywords: Initial Public Offerings, Underpricing, CEO Education Characteristics, Post-IPO Performance
JEL Classification: G10, G14, G39
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