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Initial public offer pricing, corporate governance and contextual relevance: Australian evidence
Author(s) -
Hartnett Neil A.,
Shamsuddin Abul
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12317
Subject(s) - initial public offering , corporate governance , relevance (law) , business , accounting , key (lock) , political science , finance , computer science , law , computer security
This study examines the relationship between initial public offer ( IPO ) corporate governance, IPO pricing and possible contextual relevance. A comprehensive inventory of IPO governance attributes is modelled. A positive association is reported between the inventory and IPO initial returns. This relationship is attenuated for IPO s where a diminished price relevance of governance structure is posited: smaller scale firms and/or those with alternative monitoring agents in place. Relevance appears modified and even supplanted by particular corporate priorities or the presence of other monitoring mechanisms. These contexts inform the motivation of key players regarding whether and how to act in response to the governance signal.