Impact of Corporate Governance and Ownership Structure on Survival of Initial Public Offerings: Evidence from the Philippines

Abstract

This paper examines the impact of corporate governance and ownership structure variables on the survival of initial public offerings in the Philippine Stock Exchange. Using a sample of 141 firms that went public from 1989-2011 and a seven-year observation period, the paper finds that 93.62% of IPOs survive. Employing the Cox proportional hazards model, the paper finds a negative significant relationship between survival and the ownership ratio between top five and non-top five owners. In addition, there is a negative significant relationship between survival and manufacturing industry sector and firm size. Furthermore, there is a positive significant relationship between survival and ownership retained by original owners. Moreover, there is an insignificant relationship between survival and percentage of independent directors, number of underwriters, age of the IPO firm, type of offering, and return on assets.

Keywords: Corporate Governance, Ownership Structure, Initial Public Offering, Survival, Delisting, Philippines

JEL Classification: G3, G32, G34