The consequences of political donations for IPO premium and performance

• Published in: Journal of corporate finance (Amsterdam, Netherlands) Vol. 67; p. 101888
• Main Authors: Gounopoulos, Dimitrios, Mazouz, Khelifa, Wood, Geoffrey
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.04.2021
• Subjects: Firm survival; IPO; Offer price; Political contributions; Political power; Resource dependency theory; Signaling theory; Political power; Firm survival; Resource dependency theory; Offer price; IPO; Signaling theory; Political contributions

This study explores the effect of directors' political contributions on IPOs' valuation and firm survival. We find that individual contributions by directors bring significant benefits to the IPO firms. Specifically, we show that political contributions of board members, particularly those...