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Board characteristics and the amount of capital raised in the Malaysian IPO market

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  • Badru, Bazeet O.
  • Ahmad-Zaluki, Nurwati A.
  • Wan-Hussin, Wan Nordin

Abstract

This study examines the impact of board characteristics on the amount of capital raised through an IPO for a sample of 220 Malaysian IPOs over the period of 2005–2015, applying both ordinary least squares (OLS) and quantile regression (QR) techniques. The OLS results show that board with ethnic Malay directors has a significant and positive association with the amount of capital raised, while a weak significance is found for board size. However, the QR results reveal that other than board ethnicity, other board characteristics namely board size, board independence and CEO duality are significantly associated with the amount of capital raised. The additional results suggest that QR provides a more insightful and full picture into the association than does OLS. The overall empirical evidence lends support to the resource dependence role of the board of directors at the time of an IPO.

Suggested Citation

  • Badru, Bazeet O. & Ahmad-Zaluki, Nurwati A. & Wan-Hussin, Wan Nordin, 2017. "Board characteristics and the amount of capital raised in the Malaysian IPO market," Journal of Multinational Financial Management, Elsevier, vol. 42, pages 37-55.
    • Handle: RePEc:eee:mulfin:v:42-43:y:2017:i::p:37-55
    DOI: 10.1016/j.mulfin.2017.09.001
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    3. Sosnowski Tomasz & Wawryszuk-Misztal Anna, 2019. "Board characteristics and earnings forecasts accuracy in IPO prospectuses," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 55(1), pages 25-39, March.

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    More about this item

    Keywords

    Board size; Board independence; Capital raised; Ethnicity; Gender; Quantile regression;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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