Initial public offer pricing, corporate governance and contextual relevance: Australian evidence

Neil A. Hartnett and Abul Shamsuddin ()

Accounting and Finance, 2020, vol. 60, issue 1, 335-372

Abstract: 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 IPOs 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.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:60:y:2020:i:1:p:335-372

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