Academic directors and IPO initial returns
by Bazeet Olayemi Badru; Nurwati A. Ahmad-Zaluki; Wan Nordin Wan-Hussin
International Journal of Business Governance and Ethics (IJBGE), Vol. 13, No. 1, 2018

Abstract: This study examines the impact of academic directors on IPO initial returns. With a sample of 208 Malaysian IPOs over the period of 2005 to 2015 and applying a quantile regression (QR) technique, this study finds that the academic directors are significantly and negatively associated with IPO initial returns, indicating IPOs with more directors from the academia can better serve as a signal of a company's quality. Such directors are perceived by potential investors as intellectuals capable of providing knowledgeable skills in complex decision-making, like IPO, as well as advising and monitoring the management. These findings indicate that IPO issuers can demonstrate their quality through a highly educated board.

Online publication date: Wed, 03-Oct-2018

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