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Board Of Directors And The Pricing Of Initial Public Offerings (Ipos): Does The Existence Of A Properly Structured Board Matter? Evidence From France

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  • Anis Mnif

    (High School of Commerce - FSS - Faculté des Sciences de Sfax - Université de Sfax - University of Sfax)

Abstract

The purpose of this study is to introduce the board of directors as a signal of firm quality to abate information asymmetry. This study is based on agency theory and signaling theory to suggest that the existence of properly structured board at the time of the IPO may signal high firm quality to potential investors. To do that, I examine the association between board of directors' characteristics (including board composition, board size, leadership structure (CEO duality) and existence of an audit committee) and underpricing of 133 Initial Public Offerings (IPOs) in France between 2000 and 2004. Empirical evidence suggests that there is a positive effect of board size on underpricing and a negative association between the proportion of independent directors and underpricing. However, CEO duality as well as existence of an audit committee have no significant impact on underpricing. Overall, these results are consistent with the assumption that board attributes may be used as a signal of firm quality.

Suggested Citation

  • Anis Mnif, 2009. "Board Of Directors And The Pricing Of Initial Public Offerings (Ipos): Does The Existence Of A Properly Structured Board Matter? Evidence From France," Post-Print halshs-00459257, HAL.
    • Handle: RePEc:hal:journl:halshs-00459257
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00459257
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    References listed on IDEAS

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    Cited by:

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    3. Simon Gao & Tony Chieh-Tse Hou, 2019. "An Empirical Examination of IPO Underpricing Between High-technology and Non-high-technology Firms in Taiwan," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 18(1), pages 23-51, April.

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