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Effect of Governance Characteristics on the State of the Firm after an Initial Public Offering

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  • Shelly W. Howton

Abstract

I examine firm characteristics available to investors at a firm's initial public offering date to determine whether they predict the firm's survival, acquisition, or failure. Firms survive more often than they are acquired when they are venture‐backed, the chief executive officer is the original founder, and an outside blockholder is present. The presence of an outside director does not increase the probability of survival. Firms that are more likely to survive than fail include large firms and those with longer board tenure.

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  • Shelly W. Howton, 2006. "Effect of Governance Characteristics on the State of the Firm after an Initial Public Offering," The Financial Review, Eastern Finance Association, vol. 41(3), pages 419-433, August.
    • Handle: RePEc:bla:finrev:v:41:y:2006:i:3:p:419-433
    DOI: 10.1111/j.1540-6288.2006.00150.x
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    Cited by:

    1. Livnat, Joshua & Smith, Gavin & Suslava, Kate & Tarlie, Martin, 2021. "Board tenure and firm performance," Global Finance Journal, Elsevier, vol. 47(C).
    2. Shima Amini & Sofia Johan & Eilnaz Kashefi Pour & Abdulkadir Mohamed, 2023. "Employee Welfare, Social Capital, and IPO Firm Survival," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2174-2204, November.
    3. Espenlaub, Susanne & Goyal, Abhinav & Mohamed, Abdulkadir, 2016. "Impact of legal institutions on IPO survival: A global perspective," Journal of Financial Stability, Elsevier, vol. 25(C), pages 98-112.
    4. Garima Baluja, 2018. "Does Size Matter for IPO Survival? Empirical Evidence from India," Vision, , vol. 22(1), pages 88-104, March.
    5. Francesco Paolone & Matteo Pozzoli & Nicola Cucari & Rosario Bianco, 2023. "Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 358-368, January.
    6. Hsu, Hwa-Hsien & Wu, Chloe Yu-Hsuan, 2014. "Board composition, grey directors and corporate failure in the UK," The British Accounting Review, Elsevier, vol. 46(3), pages 215-227.
    7. Marisetty, Vijaya B. & Subrahmanyam, Marti G., 2010. "Group affiliation and the performance of IPOs in the Indian stock market," Journal of Financial Markets, Elsevier, vol. 13(1), pages 196-223, February.
    8. Fernando A. Tejerina-Gaite & Miguel A. Fernández-Temprano, 2021. "The influence of board experience on firm performance: does the director’s role matter?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 685-705, September.
    9. Iwasaki, Ichiro, 2014. "Global financial crisis, corporate governance, and firm survival:," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 178-211.
    10. Garima Baluja & Balwinder Singh, 2016. "Lead Manager’s Reputation and Aftermarket Survival of Initial Public Offerings: Empirical Evidence from India," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 41(4), pages 384-404, November.
    11. Liu, Jia & Lister, Roger & Pang, Dong, 2013. "Corporate evolution following initial public offerings in China: A life-course approach," International Review of Financial Analysis, Elsevier, vol. 27(C), pages 1-20.

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