Foreign IPO capital market choice: understanding the institutional fit ofcorporate governance

R. Bell, C. Moore, Igor Filatotchev, A Rasheed

Publication: Scientific journalJournal articleResearchpeer-review

72 Citations (Scopus)

Abstract

While product market choices have been central to strategy formulation for firms in the past, the integration of financial markets makes the choice of capital markets an equally important strategic decision. We advance a comparative institutional perspective to explain capital market choice by firms making an IPO in a foreign market. We find that internal governance characteristics (founder‐CEO, executive incentives, and board independence) and external network characteristics (prestigious underwriters, degree of venture capitalist syndication, and board interlocks) are significant predictors of foreign capital market choice by foreign IPO firms. Our results suggest foreign IPO firms select a host market where the firms' governance characteristics and third party affiliations fit the host market's institutional environment.
Original languageEnglish
Pages (from-to)914 - 937
JournalStrategic Management Journal
Volume33
Issue number8
DOIs
Publication statusPublished - 2012

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