Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects

• Published in: Journal of business venturing Vol. 27; no. 2; pp. 197 - 216
• Main Authors: Bell, R. Greg, Moore, Curt B., Filatotchev, Igor
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.03.2012; Elsevier Sequoia S.A
• Subjects: Boards of directors; Corporate governance; Initial public offerings; Institutional theory; International finance; IPO; Signaling theory; Studies; Success; IPO; Signaling theory; Corporate governance; Institutional theory
• ISSN: 0883-9026; 1873-2003
• DOI: 10.1016/j.jbusvent.2010.11.001

Integrating signaling and institutional perspectives, we develop and test hypotheses relating institutions and corporate governance to foreign IPO success. Our investigation highlights the importance of three important drivers of foreign IPO success: home country legal institutions, corporate governance, and host capital market choice. This research demonstrates that board independence and country of origin effects are powerful signals. However, these factors do not have a universal impact on foreign IPO success. Instead, the value of home country institutions along with corporate governance signals are contingent upon the institutional environment in which international entrepreneurs choose to seek capital resources. ► We examine corporate governance and institutional influences on foreign IPO performance. ► The performance of foreign IPOs listing in the US is compared to those listing in the UK. ► Independent boards and legal protection influences foreign IPO performance more in the U.K.