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The Contrasting Effects of Board Composition and Structure on IPO Firm Underpricing in a Developing Context

journal contribution
posted on 2023-06-08, 11:01 authored by Bruce Hearn
This study investigates the impact of board governance features and the presence of foreign, indigenous high society executives and board diversity on levels of IPO underpricing in a unique sample of 62 Initial Primary Offerings (IPOs) from across Sub Saharan African (SSA), excluding South Africa. I find evidence that greater numbers of foreign executives increase underpricing while higher numbers of indigenous high society directors have an opposing effect. Increasing board ethnic and nationality diversity together with the establishment of nominally independent board monitoring and oversight committees are associated with higher underpricing implying that standard international governance best practice is inappropriate in a developing region dominated by narrow political economies underscored by underdeveloped formal institutions with minimal investor protection

History

Publication status

  • Published

File Version

  • Published version

Journal

International Review of Financial Analysis

ISSN

1057-5219

Publisher

Elsevier

Issue

1

Volume

21

Page range

33-44

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-04-24

First Compliant Deposit (FCD) Date

2012-02-24

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