Since 2010, on average over 70 initial public offerings (IPOs) are listed on the Australian Securities Exchange each year. These IPO firms have a wide range of performance in the short term and long term. The impact of founders on a firm's performance is a much debated topic and extant studies provide mixed evidence. Findings from other markets may not apply in Australian markets as different institutional and market settings may moderate and enhance the founder effect. This study assessed the effects of founders on IPO firms' performance in the short term and long term in Australia. By examining three founder variables of founder ownership, founder CEO and founder experience, we are able to identify founder effects on firm performance. With a dataset of 253 IPO firms from 2003 to 2013, we analysed the mean differences in IPO firms' performance among groups with different founder features. Our results indicate there are significant mean differences in underpricing between different levels of founder ownership. We conducted regression analysis for our whole sample and subsamples. Our results suggest a hump-shape curvilinear relationship between founder ownership and IPO underpricing in the short term. our findings show that IPO firms led by founder CEOs have poor performance in the long term. The analysis shows founder CEO firms are younger, smaller and have higher retained founder ownership compared to professional CEO firms.
History
Table of Contents
1. Introduction -- 2. Literature review -- 3. Discussion and development of IPO performance models -- 4. Data and methodology -- 5. Empirical results -- 6. Conclusion and implications
Notes
Empirical thesis.
Bibliography: pages 130-146
Awarding Institution
Macquarie University
Degree Type
Thesis MRes
Degree
MRes, Macquarie University, Faculty of Business and Economics, Department of Applied Finance and Actuarial Studies
Department, Centre or School
Department of Applied Finance and Actuarial Studies
Year of Award
2016
Principal Supervisor
Medhi Sadeghi
Rights
Copyright Long Zhang 2016.
Copyright disclaimer: http://mq.edu.au/library/copyright