Delisted versus remain listed: Founding the future of French IPO firms

Isabelle Martinez, Emmanuelle Negre () and Nhu Nguyen
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Isabelle Martinez: LGCO - Laboratoire Gouvernance et Contrôle Organisationnel - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse
Emmanuelle Negre: TSM - Toulouse School of Management Research - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse
Nhu Nguyen: LGCO - Laboratoire Gouvernance et Contrôle Organisationnel - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse

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Abstract: This paper examines the association between the probability of delisting for both economic and non-economic reasons and the corporate governance of IPO firms, IPO quality, post-IPO managerial ownership retention and earnings management at the time of IPO. The sample consists of 168 IPO firms listed on the French stock exchange between 2000 and 2008. At a minimum of five years after the IPO time, the proportion of delisted firms is about 10.7% (delisting for economic reasons) and 24.4% (delisting for non-economic reasons). Finally, 64.9% of the IPO firms remain listed in 2013. Four main results are highlighted (regardless of their reasons). Second, we find that the probability of delisting for economic reasons is negatively associated with the board size and the underwriter's reputation. In contrast, an aggressive earnings management at the time of IPO increases the risk of delisting for economic reasons. Third, we find that the probability of delisting for non-economic reasons degreases with the IPO quality as measured by the underwriter's reputation and the proportion of capital sold by managers. At last, pre-performance and age of IPO firms influence the likelihood to exit the market for both economic and non-economic reasons

Keywords: governance; IPO; delisting; agency conflicts; signal (search for similar items in EconPapers)
Date: 2017
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Published in Revue française de gouvernance d'entreprise, 2017, 18, pp.53-73

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01698564

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