ESG government risk and international IPO underpricing

Edward D. Baker, Thomas J. Boulton, Marcus V. Braga-Alves and Matthew R. Morey

Journal of Corporate Finance, 2021, vol. 67, issue C

Abstract: We study the association between environmental, social, and governance (ESG) government risk management and firm-level IPO underpricing between 2008 and 2018. Examining 7446 IPOs issued in 36 countries, we find that IPO underpricing tends to be lower in countries with higher ESG Government Ratings. When we uniquely examine the environmental, social, and governance pillars, we find that underpricing tends to be lower in countries with stronger risk management practices in each of these areas. Additional analysis indicates that the negative impact of ESG ratings on IPO underpricing is more pronounced in countries with more transparent financial disclosures, higher liability standards, and stronger shareholder protections.

Keywords: ESG; Initial public offerings; Underpricing (search for similar items in EconPapers)
JEL-codes: G12 G15 G18 M14 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:67:y:2021:i:c:s0929119921000341

DOI: 10.1016/j.jcorpfin.2021.101913

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