Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards
Recent literature on initial public offerings (IPOs) suggests a significant effect of tone in IPO underpricing but ignores its determinants. This study concentrates on the factors that shape the tone of the information disclosed in IPOs. Sampling 211 Latin American IPOs during the period 2000–2019,...
- Autores:
-
González Ferrero, Maximiliano
Guzmán Vásquez, Alexander
Téllez Falla, Diego Fernando
Trujillo Dávila , María Andrea
- Tipo de recurso:
- Article of investigation
- Fecha de publicación:
- 2021
- Institución:
- Colegio de Estudios Superiores de Administración
- Repositorio:
- Repositorio CESA
- Idioma:
- eng
- OAI Identifier:
- oai:repository.cesa.edu.co:10726/5057
- Palabra clave:
- Initial public offer
Text analysis
Information disclosure
Corporate governance
IPO valuation
- Rights
- License
- Acceso Restringido
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González Ferrero, Maximiliano6ed7fd26-b94e-4e41-8b5a-390d5ef46a5f600Guzmán Vásquez, Alexandere6815926-cc9f-40cd-bb0e-f549642805cf600Téllez Falla, Diego Fernando73192d46-1a72-4c82-9e37-f5b55205a208600Trujillo Dávila , María Andrea5b131e3f-c0dd-4f10-9a55-2909001129ad600González Ferrero, Maximiliano [0000-0002-8675-6911]Guzmán Vásquez, Alexander [0000-0001-7675-048X]Téllez Falla, Diego Fernando [0000-0002-1902-2870]Trujillo Dávila, María Andrea [0000-0002-9592-7890]González Ferrero, Maximiliano [17434254200]Guzmán Vásquez, Alexander [55207224400]Téllez Falla, Diego Fernando [57200984310]Trujillo Dávila, María Andrea [55206416700]2023-06-21T22:23:01Z2023-06-21T22:23:01Z2021-120275-5319http://hdl.handle.net/10726/5057instname:Colegio de Estudios Superiores de Administración – CESAreponame:Biblioteca Digital – CESArepourl:https://repository.cesa.edu.co/1878-3384https://doi.org/10.1016/j.ribaf.2021.101481engElsevier Inc.Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boardsarticlehttp://purl.org/coar/resource_type/c_2df8fbb1http://purl.org/coar/resource_type/c_6501info:eu-repo/semantics/articlehttp://purl.org/redcol/resource_type/ARThttp://purl.org/coar/version/c_71e4c1898caa6e32Acceso Restringidohttp://vocabularies.coar-repositories.org/access_rights/c_16ec/http://purl.org/coar/access_right/c_16ecRecent literature on initial public offerings (IPOs) suggests a significant effect of tone in IPO underpricing but ignores its determinants. This study concentrates on the factors that shape the tone of the information disclosed in IPOs. Sampling 211 Latin American IPOs during the period 2000–2019, we find empirical evidence that a powerful CEO can influence tone, avoiding unfavorable tone and fostering the use of positive words in the information disclosed to the market. We also show that more independent boards tend to use more unfavorable tones. Additionally, we find a non-monotonic relationship between board size and the tone in the prospectus, which suggests that an optimal board size mitigates the excessive use of positive tone and leads to more unfavorable tones in the IPO prospectus. Overall, well-functioning boards counterbalance powerful CEOs and generate more realistic disclosure to the market. Finally, we find that market-dominant auditors, age of the issuing firm, proposed use of proceeds, and the number of risk factors significantly affect the tone in the information disclosed.https://orcid.org/0000-0002-8675-6911https://orcid.org/0000-0001-7675-048Xhttps://orcid.org/0000-0002-1902-2870https://orcid.org/0000-0002-9592-7890https://www.scopus.com/authid/detail.uri?authorId=17434254200https://www.scopus.com/authid/detail.uri?authorId=55207224400https://www.scopus.com/authid/detail.uri?authorId=57200984310https://www.scopus.com/authid/detail.uri?authorId=5520641670058Research in International Business and FinanceInitial public offerText analysisInformation disclosureCorporate governanceIPO valuation10726/5057oai:repository.cesa.edu.co:10726/50572023-10-02 20:03:41.305metadata only accessBiblioteca Digital - CESAbiblioteca@cesa.edu.co |
dc.title.eng.fl_str_mv |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
title |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
spellingShingle |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards Initial public offer Text analysis Information disclosure Corporate governance IPO valuation |
title_short |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
title_full |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
title_fullStr |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
title_full_unstemmed |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
title_sort |
Determinants of corporate tone in an initial public offering : powerful CEOs versus well-functioning boards |
dc.creator.fl_str_mv |
González Ferrero, Maximiliano Guzmán Vásquez, Alexander Téllez Falla, Diego Fernando Trujillo Dávila , María Andrea |
dc.contributor.author.spa.fl_str_mv |
González Ferrero, Maximiliano Guzmán Vásquez, Alexander Téllez Falla, Diego Fernando Trujillo Dávila , María Andrea |
dc.contributor.orcid.none.fl_str_mv |
González Ferrero, Maximiliano [0000-0002-8675-6911] Guzmán Vásquez, Alexander [0000-0001-7675-048X] Téllez Falla, Diego Fernando [0000-0002-1902-2870] Trujillo Dávila, María Andrea [0000-0002-9592-7890] |
dc.contributor.scopus.none.fl_str_mv |
González Ferrero, Maximiliano [17434254200] Guzmán Vásquez, Alexander [55207224400] Téllez Falla, Diego Fernando [57200984310] Trujillo Dávila, María Andrea [55206416700] |
dc.subject.proposal.none.fl_str_mv |
Initial public offer Text analysis Information disclosure Corporate governance IPO valuation |
topic |
Initial public offer Text analysis Information disclosure Corporate governance IPO valuation |
description |
Recent literature on initial public offerings (IPOs) suggests a significant effect of tone in IPO underpricing but ignores its determinants. This study concentrates on the factors that shape the tone of the information disclosed in IPOs. Sampling 211 Latin American IPOs during the period 2000–2019, we find empirical evidence that a powerful CEO can influence tone, avoiding unfavorable tone and fostering the use of positive words in the information disclosed to the market. We also show that more independent boards tend to use more unfavorable tones. Additionally, we find a non-monotonic relationship between board size and the tone in the prospectus, which suggests that an optimal board size mitigates the excessive use of positive tone and leads to more unfavorable tones in the IPO prospectus. Overall, well-functioning boards counterbalance powerful CEOs and generate more realistic disclosure to the market. Finally, we find that market-dominant auditors, age of the issuing firm, proposed use of proceeds, and the number of risk factors significantly affect the tone in the information disclosed. |
publishDate |
2021 |
dc.date.issued.none.fl_str_mv |
2021-12 |
dc.date.accessioned.none.fl_str_mv |
2023-06-21T22:23:01Z |
dc.date.available.none.fl_str_mv |
2023-06-21T22:23:01Z |
dc.type.none.fl_str_mv |
article |
dc.type.coar.fl_str_mv |
http://purl.org/coar/resource_type/c_6501 |
dc.type.coar.none.fl_str_mv |
http://purl.org/coar/resource_type/c_2df8fbb1 |
dc.type.driver.none.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.redcol.none.fl_str_mv |
http://purl.org/redcol/resource_type/ART |
dc.type.coarversion.none.fl_str_mv |
http://purl.org/coar/version/c_71e4c1898caa6e32 |
format |
http://purl.org/coar/resource_type/c_2df8fbb1 |
dc.identifier.issn.none.fl_str_mv |
0275-5319 |
dc.identifier.uri.none.fl_str_mv |
http://hdl.handle.net/10726/5057 |
dc.identifier.instname.none.fl_str_mv |
instname:Colegio de Estudios Superiores de Administración – CESA |
dc.identifier.reponame.none.fl_str_mv |
reponame:Biblioteca Digital – CESA |
dc.identifier.repourl.none.fl_str_mv |
repourl:https://repository.cesa.edu.co/ |
dc.identifier.eissn.none.fl_str_mv |
1878-3384 |
dc.identifier.doi.none.fl_str_mv |
https://doi.org/10.1016/j.ribaf.2021.101481 |
identifier_str_mv |
0275-5319 instname:Colegio de Estudios Superiores de Administración – CESA reponame:Biblioteca Digital – CESA repourl:https://repository.cesa.edu.co/ 1878-3384 |
url |
http://hdl.handle.net/10726/5057 https://doi.org/10.1016/j.ribaf.2021.101481 |
dc.language.iso.none.fl_str_mv |
eng |
language |
eng |
dc.relation.citationvolume.none.fl_str_mv |
58 |
dc.relation.ispartofjournal.none.fl_str_mv |
Research in International Business and Finance |
dc.rights.coar.fl_str_mv |
http://purl.org/coar/access_right/c_16ec |
dc.rights.local.none.fl_str_mv |
Acceso Restringido |
dc.rights.coar.none.fl_str_mv |
http://vocabularies.coar-repositories.org/access_rights/c_16ec/ |
rights_invalid_str_mv |
Acceso Restringido http://vocabularies.coar-repositories.org/access_rights/c_16ec/ http://purl.org/coar/access_right/c_16ec |
dc.publisher.none.fl_str_mv |
Elsevier Inc. |
publisher.none.fl_str_mv |
Elsevier Inc. |
institution |
Colegio de Estudios Superiores de Administración |
repository.name.fl_str_mv |
Biblioteca Digital - CESA |
repository.mail.fl_str_mv |
biblioteca@cesa.edu.co |
_version_ |
1793339986397888512 |