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Founder CEO management and the long-run investment performance of IPO firms

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  • Gao, Ning
  • Jain, Bharat A.

Abstract

This study provides a comparative analysis of the long-run investment performance of founder and non-founder CEO led IPO firms in high and low technology environments. We find weak evidence of superior long-run investment performance on the part of founder CEO led IPO firms, since the significance of the results are sensitive to choice of benchmark, portfolio weighting method, and factor regression model. However, in the context of high technology IPO firms, we find consistent evidence to indicate that founder CEO led firms provide significantly higher long-run returns relative to non-founder CEO led firms. Our results suggest that the unique nature of founder CEO leadership is particularly beneficial to IPO firms in high technology environments.

Suggested Citation

  • Gao, Ning & Jain, Bharat A., 2011. "Founder CEO management and the long-run investment performance of IPO firms," Journal of Banking & Finance, Elsevier, vol. 35(7), pages 1669-1682, July.
  • Handle: RePEc:eee:jbfina:v:35:y:2011:i:7:p:1669-1682
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:worbus:v:52:y:2017:i:5:p:628-639 is not listed on IDEAS
    2. Kolb, Johannes & Tykvová, Tereza, 2016. "Going public via special purpose acquisition companies: Frogs do not turn into princes," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 80-96.
    3. Jain, Bharat A. & Li, Joanne & Shao, Yingying, 2013. "Governance, product market competition and cash management in IPO firms," Journal of Banking & Finance, Elsevier, vol. 37(6), pages 2052-2068.
    4. repec:eee:corfin:v:48:y:2018:i:c:p:217-243 is not listed on IDEAS
    5. repec:eee:finana:v:56:y:2018:i:c:p:19-31 is not listed on IDEAS
    6. Krolikowski, Marcin W., 2016. "Incentive pay and acquirer returns – The impact of Sarbanes–Oxley," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 99-111.
    7. Liu, Jia & Lister, Roger & Pang, Dong, 2013. "Corporate evolution following initial public offerings in China: A life-course approach," International Review of Financial Analysis, Elsevier, vol. 27(C), pages 1-20.

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