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Academic directors and IPO initial returns

Author

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

Abstract

This study examines the impact of academic directors on IPO initial returns. With a sample of 208 Malaysian IPOs over the period of 2005 to 2015 and applying a quantile regression (QR) technique, this study finds that the academic directors are significantly and negatively associated with IPO initial returns, indicating IPOs with more directors from the academia can better serve as a signal of a company's quality. Such directors are perceived by potential investors as intellectuals capable of providing knowledgeable skills in complex decision-making, like IPO, as well as advising and monitoring the management. These findings indicate that IPO issuers can demonstrate their quality through a highly educated board.

Suggested Citation

  • Bazeet Olayemi Badru & Nurwati A. Ahmad-Zaluki & Wan Nordin Wan-Hussin, 2018. "Academic directors and IPO initial returns," International Journal of Business Governance and Ethics, Inderscience Enterprises Ltd, vol. 13(1), pages 33-58.
    • Handle: RePEc:ids:ijbget:v:13:y:2018:i:1:p:33-58
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    Cited by:

    1. Liqiang Chen & Hong Fan & Xiaofei Song, 2023. "Impact of professor‐directors on Chinese firms' environmental performance," International Review of Finance, International Review of Finance Ltd., vol. 23(4), pages 696-720, December.

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