Determinants of Idiosyncratic Volatility for Biotech IPO Firms
Financial Management, 2007
23 Pages Posted: 5 Jun 2007 Last revised: 29 Sep 2013
In this paper we examine the cross-sectional determinants of idiosyncratic volatility of biotech IPO firms. We extend current research in two directions. First, we test whether CEO stock options impact on idiosyncratic volatility. Second, we test new hypotheses that relate some easily identifiable managerial characteristics to idiosyncratic volatility. We find that the CEO stock options, resource dependence capabilities, and the age of board members help predict idiosyncratic volatility. Our results are robust for the various measures of idiosyncratic volatility and model specifications.
Keywords: Entrepreneurship, Life Science, NASDAQ, IPO
JEL Classification: G30, K20, M13, O32
Suggested Citation: Suggested Citation