The impact of shareholders and creditors rights on IPO performance: An international study

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The impact of shareholders and creditors rights on IPO performance: An international study

Espenlaub, Susanne; Goyal, Abhinav; Mohamed, Abdulkadir
Date: 2019-11-09
Copyright: © 2019, Elsevier Ltd. All rights reserved. This manuscript version is made available under the CC BY-NC-ND 4.0 licence.
Copyright information: https://creativecommons.org/licenses/by-nc-nd/4.0/
Related: http://www.sciencedirect.com/science/article/pii/S0890838919300976
Full text restriction information: Access to this article is restricted until 24 months after publication by request of the publisher.
Restriction lift date: 2021-11-09
Citation: Espenlaub, S., Goyal, A. and Mohamed, A. (2019) 'The impact of shareholders and creditors rights on IPO performance: An international study', The British Accounting Review, 100872 (22 pp). doi: 10.1016/j.bar.2019.100872
Published Version: 10.1016/j.bar.2019.100872

Abstract:

This paper examines the impact of cross-country variation in shareholders' and debt holders' rights on post-IPO performance and survival of newly listed stocks across the globe. Using a sample of 10,490 initial public offerings (IPOs) in 40 countries between 2000 and 2013, we find that post-IPO performance and survival is better in countries with stronger shareholder protection, but the impact of creditor protection is negative i.e. stronger creditor protection leads to poor post-IPO performance and survival. This effect is driven by rules requiring creditors’ consent for company reorganization and the mandatory replacement of incumbent managers. Reputable IPO advisors exacerbate the positive impact of shareholder rights and the negative impact of creditor rights.

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© 2019, Elsevier Ltd. All rights reserved. This manuscript version is made available under the CC BY-NC-ND 4.0 licence. Except where otherwise noted, this item's license is described as © 2019, Elsevier Ltd. All rights reserved. This manuscript version is made available under the CC BY-NC-ND 4.0 licence.
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