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The impact of governance on IPO underpricing and performance at the country and corporate level: Literature review and research directions

Author

Listed:
  • Maximiliano González
  • Alexander Guzmán
  • Diego F. Tellez-Falla
  • María Andrea Trujillo

    (EAFIT)

Abstract

We update and review the current literature on IPO underpricing and performance, stressing the link with corporate governance at the country and firm-level. We focus on the separation between ownership and control and the signaling that firms’ governance structure could send to the IPO market. It is clear from this review that improvements in governance institutions tend to reduce underpricing and affect IPO performance positively, but it is not entirely clear how governance at the firm level could impact IPOs’ underpricing and performance. As shown, there are many interesting avenues for further research in this area.

Suggested Citation

  • Maximiliano González & Alexander Guzmán & Diego F. Tellez-Falla & María Andrea Trujillo, 2020. "The impact of governance on IPO underpricing and performance at the country and corporate level: Literature review and research directions," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 10(1), pages 1-16.
    • Handle: RePEc:afj:journ3:v:10:y:2020:i:1:p:1-16
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    File URL: https://journals.co.za/content/rdfin/10/1/ejc-rdfin-v10-n1-a1
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    Cited by:

    1. González, Maximiliano & Guzmán, Alexander & Tellez-Falla, Diego F. & Trujillo, María Andrea, 2021. "Determinants of corporate tone in an initial public offering: Powerful CEOs versus well-functioning boards," Research in International Business and Finance, Elsevier, vol. 58(C).

    More about this item

    Keywords

    Corporate governance; initial public offering; agency theory; signaling;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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