Abstract
We examine the impact of a chairman's famine experience in childhood years (FECY) on her firm's IPO discount. Based on the results of previous literature, FECY drives a firm to be conservative. In the IPO context, the managerial conservatism may make the IPO discount higher or lower, depending on the interpretation of the conservatism by investors. The findings suggest that FECY chairmen IPO firms exhibit significant higher IPO discount than that of non-FECY chairman IPO firms, indicating that IPO investors do not interpret the conservative managerial policies a positive signal. The results are robust to alternative metric of IPO discount.
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