Does Share Capital Mater for Company Performance?
Economic Research-Ekonomska Istraživanja, DOI: 10.1080/1331677X.2021.1985575
26 Pages Posted: 25 Nov 2019 Last revised: 8 Oct 2021
Date Written: October 4, 2021
This article examines the impact of share capital on companies’ performance as well as the effect of accounting information on companies’ market performance and the impact of pre-IPO information on the predictive power of companies' performance after an initial public offering (IPO). The research was conducted on a sample of IPO companies debuting on the Warsaw Stock Exchange. It shows that a large percentage of share capital in equity reduces capital flexibility but can also be a signal to improve companies' market performance. It also shows that after an IPO, the market's information efficiency diminishes, which means, among other things, that pre-IPO accounting information has a negligible impact on the companies’ market performance after the IPO.
Keywords: capital structure, share capital, signalling, face value, capital flexibility, information efficiency, company performance, IPO, WSE
JEL Classification: G14, G32, K22, M41, O16
Suggested Citation: Suggested Citation