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What use of proceeds do family IPOs signal? The influence of family generational stage and family CEO

Maria Angela Manzi (Department of Social Sciences (DISS), Corporate Social Responsibility Research Laboratory (CSR Lab), University of Foggia, Foggia, Italy) (Department of Economics, Management, Institutions (DEMI), Family Business Lab on Accounting and Governance (FLAG), University of Naples “Federico II”, Naples, Italy)
Andrea Sanseverino (Department of Economics, Management, Institutions (DEMI), Family Business Lab on Accounting and Governance (FLAG), University of Naples “Federico II”, Naples, Italy)
Emmadonata Carbone (Department of Economics, Management, Institutions (DEMI), Family Business Lab on Accounting and Governance (FLAG), University of Naples “Federico II”, Naples, Italy)
Alberto Kunz (Department of Economics, Management, Institutions (DEMI), University of Naples “Federico II”, Naples, Italy)

Journal of Family Business Management

ISSN: 2043-6238

Article publication date: 8 October 2024

47

Abstract

Purpose

This study aims to investigate the relationship between the family generational stage and the intended use of the Initial Public Offering (IPO) proceeds disclosed in the prospectus. With the aim to explore family business (FB) heterogeneity, it also explores the moderating role of the family CEO.

Design/methodology/approach

We draw on signalling theory and hand-collected data on Italian family IPOs that occurred in the period 2000–2020, disentangling the intended use of IPO proceeds as distinguished into three categories. We employ logit regression to test our hypotheses.

Findings

According to our theoretical predictions, we find that the family generational stage positively affects the disclosure of the investment reason as the intended use of IPO proceeds, while it negatively influences the use for recapitalization and general corporate purposes. The first relationship is moderated by the presence of a family CEO. Our results remain robust with different FBs definitions and a different empirical method.

Originality/value

To the best of the authors’ knowledge, this paper is the first to address the topic of the intended use of IPO proceeds in FBs. In doing so, it opens avenues for future research by enriching an underdeveloped, albeit growing, area of research, that of preparing for the market scrutiny in family IPOs.

Keywords

Citation

Manzi, M.A., Sanseverino, A., Carbone, E. and Kunz, A. (2024), "What use of proceeds do family IPOs signal? The influence of family generational stage and family CEO", Journal of Family Business Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFBM-07-2024-0159

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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