The purpose of this paper is to extend governance research in the small business context by examining the moderating influence of top executive involvement on the board of directors on market valuation.
Drawing on a sample of initial public offering (IPO) high-tech firms engaged in late-stage funding, the study uses stepwise regression to test board involvement moderation effects.
Primary market investors reward governance structures that limit founder power.
The current study introduces the notion that optimal market valuation depends not only on whether a CEO-founder governs the firm, but also on level of involvement on the board of directors.
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