When the going gets tough: board capital and survival of new economy IPO firms

Chancharat, Nongnit and Krishnamurti, Chandrasekhar and Tian, Gary (2009) When the going gets tough: board capital and survival of new economy IPO firms. In: Asian FA 2009: New Knowledge...for Finance, 30 Jun-3 Jul 2009, Brisbane, Australia.

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Abstract

This study investigates the influence of corporate governance attributes on the likelihood of survival for 127 new economy IPO companies that listed on the ASX between 1994 to 2002. We use survival analysis techniques utilizing the Cox proportional hazards model with three main categories of corporate governance attributes; a) board size, b) board independence and c) ownership concentration We find that the survival time is negatively related to the percentage holdings of the top 20 shareholders. Our results also suggest that new economy IPO companies with low leverage and small company size are more likely to survive. However, the results indicate that board size and board independence do not explain the survival likelihood of new economy IPO firms. Our results suggest that corporate governance mechanisms that are designed specifically to protect minority shareholders and other providers of external capital are of little value during periods of extreme financial duress.


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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: No evidence of copyright restrictions.
Depositing User: Professor Chandrasekhar Krishnamurti
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 22 Jul 2010 09:14
Last Modified: 02 Jul 2013 23:38
Uncontrolled Keywords: corporate governance; survival analysis; new economy sector; Initial Public Offerings
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9104 Management and Productivity > 910402 Management
URI: http://eprints.usq.edu.au/id/eprint/6802

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