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| Author: | Latham, S. Braun, M. R. |
| Title: | To IPO or not to IPO: risks, uncertainty and the decision to go public |
| Journal: | British Journal of Management
2010 : SEP, VOL. 21:3 p. 666-683 |
| Index terms: | securities public companies initial public offerings chief executive officers decision making capital markets stock exchanges corporate governance participation |
| Language: | eng |
| Abstract: | In this article, three views of agency theory are adopted to examine managerial risk-taking in uncertain markets. Employing 124 companies, the effect of CEO ownership on the decision to continue or withdraw an initial public offering (IPO) in declining public equity markets is investigated. An inverse U-shaped relationship is found between CEOs' equity participation and the decision to perform a public offering: the likelihood of IPO cancellation in weak capital markets increases as CEOs have too little or too much ownership. The findings also show that a company's debt levels are positively connected with the IPO decision. |
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