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Does childhood famine experience matter in IPO discount? Evidence from the Great Chinese Famine

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  • Zhang, Xuehui
  • Gao, Kaijuan
  • Chan, Kam C.
  • Zhuo, Rongsheng

Abstract

We examine the impact of a chairman's famine experience in childhood years (FECY) on her firm's IPO discount. Based on the results of previous literature, FECY drives a firm to be conservative. In the IPO context, the managerial conservatism may make the IPO discount higher or lower, depending on the interpretation of the conservatism by investors. The findings suggest that FECY chairmen IPO firms exhibit significant higher IPO discount than that of non-FECY chairman IPO firms, indicating that IPO investors do not interpret the conservative managerial policies a positive signal. The results are robust to alternative metric of IPO discount.

Suggested Citation

  • Zhang, Xuehui & Gao, Kaijuan & Chan, Kam C. & Zhuo, Rongsheng, 2021. "Does childhood famine experience matter in IPO discount? Evidence from the Great Chinese Famine," Finance Research Letters, Elsevier, vol. 39(C).
    • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319312875
    DOI: 10.1016/j.frl.2020.101582
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    References listed on IDEAS

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    Cited by:

    1. Chan, Kam C. & Li, Guangzi, 2022. "Prior banking relationships and long-term IPO performance," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 123-134.
    2. Zhao, Binjie & Tan, Jianhua & Chan, Kam C., 2022. "Does a CEO's prior academic experience helpful to an IPO firm? The case of IPO discount," Finance Research Letters, Elsevier, vol. 47(PB).
    3. Xue, Fei & Wang, Xin & Xie, Yan & Zhang, Weihua, 2022. "Does CEO's early life experience affect corporate bond yield spread? Evidence from China's great famine," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 1012-1024.
    4. Han, Yu & Chi, Wei & Zhou, Jinyi, 2022. "Prosocial imprint: CEO childhood famine experience and corporate philanthropic donation," Journal of Business Research, Elsevier, vol. 139(C), pages 1604-1618.
    5. Hou, Fei & Li, Meina & Xu, Yang & Zhou, Song, 2023. "Signing auditors’ cultural background and client investment efficiency," Finance Research Letters, Elsevier, vol. 51(C).
    6. Jin, Yuying & Ye, Guangyu, 2024. "How does CEOs’ early-life experience of China’s Great Famine impact corporate green innovation?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 42(C).
    7. Gao, Kaijuan & Wang, Manya & Liu, Jin, 2024. "Board chair gender, glass ceiling, and IPO underpricing: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1152-1171.
    8. Chan, Kam C. & He, Jie & Li, Changwei & Zhang, Linlang, 2023. "Narcissistic managers and IPO underpricing," International Review of Financial Analysis, Elsevier, vol. 89(C).

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