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Boards, retained ownership and failure risk of French IPO firms

Chiraz Djerbi (FSEGS, Sfax, Tunisia)
Jarboui Anis (Department of Management, ISAAS, Sfax, Tunisia)

Corporate Governance

ISSN: 1472-0701

Article publication date: 2 February 2015

Abstract

Purpose

This paper aims to investigate the relationship between corporate governance structures of French initial public offering (IPO) firms and the likelihood of failure and involuntary delisting from the stock exchange in the long run.

Design/methodology/approach

A matched-pairs research design was used and 36 delisted IPO firms were compared to an equal number of control IPO firms matched in terms of time, size and industry. Conditional logistic regression analyses were performed, and it was found that corporate governance structures in delisted IPO firms were relatively weak compared to control IPO firms.

Findings

A significant negative association was found between the likelihood of exchange delisting and the proportion of independent directors. A positive and significant relationship was also found between the likelihood of exchange delisting on the one hand and the chief executive officer/Chair role duality and the retained ownership by insiders after the IPO on the other hand. However, no relationship was detected between IPO failure risk and board size at the IPO time.

Originality/value

Retained ownership and failure risk of French IPO firms.

Keywords

Citation

Djerbi, C. and Anis, J. (2015), "Boards, retained ownership and failure risk of French IPO firms", Corporate Governance, Vol. 15 No. 1, pp. 108-121. https://doi.org/10.1108/CG-10-2013-0115

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited