CEO Education and the Ability to Raise Capital
Posted: 4 Jun 2019 Last revised: 29 Sep 2019
Date Written: April 17, 2019
Exploiting a unique hand-collected dataset, we offer robust evidence that IPO firms led by CEOs holding advanced degrees or having graduated from selective academic institutions are associated with superior IPO performance (i.e., lower underpricing). The impact of the CEO education background is pronounced among hard-to-value firms. Consistent with the notion that firms signal their management quality by leveraging the prestige of CEO education, we find that the results also hold in the long-term and are mainly driven by CEOs with Doctoral Degrees. Overall, our results suggest that education delivers the skills required to withstand the demands of public trading.
Keywords: Initial Public Offerings, Underpricing, CEO Education Characteristics, Post-IPO Performance
JEL Classification: G10, G14, G39
Suggested Citation: Suggested Citation