Legal perception and finance : the case of IPO firm value
| Autor: | Gerhard Schnyder, Kun Fu, Ruth V. Aguilera, Mathias M. Siems, Anna Grosman |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Value (ethics)
Strategy and Management Corporate governance media_common.quotation_subject 05 social sciences Enterprise value General Business Management and Accounting Entrepreneurial finance Microeconomics Management of Technology and Innovation 0502 economics and business Economics 050211 marketing Quality (business) Positive law Initial public offering 050203 business & management Valuation (finance) media_common |
| Popis: | First published online: 14 June 2021 In this paper, we contribute to the literature on institutional determinants of IPO valuation. We introduce the concept of ‘legal signalling’, which focuses on the perception of the quality of law and thus complements the existing institutional approaches to IPO valuation which consider the quality of the positive law (‘standard view’) and firm-level corporate governance practices (‘firm signalling view’). Our approach explicitly models the difference between the effect of the positive law and the effect of the perception of law on IPO value. Based on a worldwide longitudinal dataset of IPO performance across a large number of countries, we find strong support for the claim that the perception of the quality of law is more important than its actual quality to explain post-IPO firm value. This effect holds regardless of whether the law's quality is correctly perceived or misperceived. Overall, our findings underscore the need for a more sophisticated theorization of the ways in which law affects entrepreneurial finance. This article was published Open Access with the support from the EUI Library through the CRUI - Wiley Transformative Agreement (2020-2023) |
| Databáze: | OpenAIRE |
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