Abstract
Building on the signalling theory, the present study theorizes that family overhang, which indicates the quota of shares retained by the family over the quota of shares offered at IPO, positively affects the likelihood of choosing a non-family CEO versus a founder family CEO or a non-founder family CEO at the IPO stage. That is, family IPOs use the non-family CEO status as a non-family related signal for the market. Yet, in choosing between a founder family CEO and a non-founder family CEO at the IPO stage, the former is more likely to be selected. Additionally, family generational involvement strengthens the above-mentioned relationships. Drawing from a sample of Italian family firm IPOs, important theoretical contributions flowing from our study are shared in the concluding section.
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