CEO Education and the Ability to Raise Capital
Posted: 4 Jun 2019 Last revised: 4 Feb 2020
Date Written: April 17, 2019
Exploiting a unique hand-collected dataset, we find that IPO firms led by CEOs with superior education credentials – in terms of level and quality – are associated with superior IPO performance. The impact of CEO education is pronounced among hard-to-value firms and CEOs with high career concerns. We also exploit information about the major of each CEO’s degree and show that investors perceive more favorably CEOs who obtained a degree in business, engineering, pharmacy, or law. The baseline results also hold in the long-term and are mainly driven by CEOs holding Doctoral Degrees.
Keywords: Initial Public Offerings, Underpricing, CEO Education Characteristics, Post-IPO Performance
JEL Classification: G10, G14, G39
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