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The impact of post-IPO changes in corporate governance mechanisms on firm performance: evidence from young Australian firms

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Abstract

This paper examines the potential impact of governance mechanisms (top management team structure and board composition) on post-IPO performance of young Australian firms from 2002-2007. We find that change in board of directors and TMT membership significantly affects firm performance. The higher proportion of the IPO original board remains, the better performance. An analogous relationship between the proportion of original TMT members and firm performance is also documented. Our study reveals that both original TMT and board members have a significant effect on both short-term and long-term IPO performance. We conclude that the retention of both the original directors and TMT members is favourable to young IPO firms and their post-IPO performance.

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  • Chowdhury, Biplob & Dungey, Mardi & Pham, Thu Phuong, 2014. "The impact of post-IPO changes in corporate governance mechanisms on firm performance: evidence from young Australian firms," Working Papers 2014-11, University of Tasmania, Tasmanian School of Business and Economics, revised 24 Sep 2014.
    • Handle: RePEc:tas:wpaper:201411
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    More about this item

    Keywords

    Corporate governance; board composition; top management teams; young firms; post-IPO performance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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