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Determinants of family firm IPO underpricing: Evidence from Japan

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  • Funaoka, Kenta
  • Yao, Zhihua

Abstract

This study analyzes 94 firms that were listed on the JASDAQ between 2015 and 2021, with a specific focus on identifying the determinants of underpricing in family firms during their initial public offering (IPO). In Japan, over 90 % of enterprises are family-owned, with even half of the publicly listed companies falling into this category. The findings revealed that, ceteris paribus, firms with founding CEOs experienced less underpricing at the time of going public compared to those without. This difference was more significant in companies with higher management ownership and a higher ratio of external directors. These results emphasize the importance of strong governance structures in reducing underpricing for family firms during their IPOs.

Suggested Citation

  • Funaoka, Kenta & Yao, Zhihua, 2025. "Determinants of family firm IPO underpricing: Evidence from Japan," Japan and the World Economy, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:japwor:v:73:y:2025:i:c:s0922142524000574
    DOI: 10.1016/j.japwor.2024.101294
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