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

See all articles by Tadeusz Dudycz

Tadeusz Dudycz

Wroclaw University of Science and Technology, Faculty of Management

Date Written: October 4, 2021

Abstract

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

Dudycz, Tadeusz, Does Share Capital Mater for Company Performance? (October 4, 2021). Economic Research-Ekonomska Istraživanja, DOI: 10.1080/1331677X.2021.1985575, Available at SSRN: https://ssrn.com/abstract=3485999 or http://dx.doi.org/10.2139/ssrn.3485999

Tadeusz Dudycz (Contact Author)

Wroclaw University of Science and Technology, Faculty of Management ( email )

ul. Smoluchowskiego 25
Wroclaw, 50-372
Poland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
200
Abstract Views
1,007
Rank
227,924
PlumX Metrics