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IPO Firm Executives, Compensation, and Selling


  • Jaemin Kim

    (San Diego State University)

  • Kuntara Pukthuanthong

    (San Diego State University)


IPO firm executives are significant net sellers in the year immediately following the IPO year. Two significant variables affecting their sales are the number of stock options exercised during the year and the number of shares held at the end of the preceding year. Contrary to the findings of the previous studies, the number of stock options and the number of restricted stocks turn out to be insignificant. The evidence suggests that IPO executives sell mainly to realize a significant part of their undiversified wealth; however, they do not sell to explicitly hedge against stock option grants or to exploit potential overvaluation.

Suggested Citation

  • Jaemin Kim & Kuntara Pukthuanthong, 2006. "IPO Firm Executives, Compensation, and Selling," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(1), pages 3-21, Spring.
  • Handle: RePEc:pep:journl:v:11:y:2006:i:1:p:3-21

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    References listed on IDEAS

    1. Chen, Tain-Jy, 1992. "Determinants of Taiwan's direct foreign investment : The case of a newly industrializing country," Journal of Development Economics, Elsevier, vol. 39(2), pages 397-407, October.
    2. Li, Jiatao & Guisinger, Stephen, 1991. "How well do foreign firms compete in the United States?," Business Horizons, Elsevier, vol. 34(6), pages 49-53.
    3. Robert J. Newman & Geoffrey K. Turnbull, 1991. "The Interindustry Distribution Of Effective Tax Rates For A State Corporate Income Tax," The Review of Regional Studies, Southern Regional Science Association, vol. 21(1), pages 65-78, Spring.
    4. William H Davidson, 1980. "The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(2), pages 9-22, June.
    5. Feltenstein, Andrew & Shah, Anwar, 1993. "General Equilibrium Effects of Taxation on Investment in a Developing Country: The Case of Pakistan," Public Finance = Finances publiques, , vol. 48(3), pages 366-386.
    6. Xiaming Liu & Haiyan Song & Yingqi Wei & Peter Romilly, 1997. "Country characteristics and foreign direct investment in China: A panel data analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(2), pages 313-329, June.
    7. Zhang, Kevin Honglin, 1999. "Foreign Direct Investment and Economic Growth: Evidence from Ten East Asian Economies," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 52(4), pages 517-535.
    8. repec:sae:niesru:v:160:y::i:1:p:87-99 is not listed on IDEAS
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    More about this item


    Compensation ; Executives ; Firm ; Firms ; IPO;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects


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