Abstract
AbstractThis paper examines the impact of innovator CEOs on their firms' IPO underpricing, long‐run performance and post‐IPO innovation. Firstly, we find that IPO firms led by innovator CEOs experience lower first‐day returns (indicating lower IPO underpricing). This phenomenon can be attributed to a CEO's innovative ability, as it plays a pivotal role in mitigating information asymmetry within the IPO market. Secondly, we observe that IPO firms with innovator CEOs have greater IPO long‐run performance. Lastly, our analysis reveals that IPO firms led by innovator CEOs demonstrate greater firm‐wide innovation up to 4 years after the IPO. Overall, our study highlights the effect of CEO characteristics on firm performance in the IPO market.
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