Building Perceived Quality of Founder-Involved IPO Firms: Founders' Effects on Board Selection and Stock Market Performance

Salim Chahine, Igor Filatotchev, Shaker A. Zahra

Research output: Contribution to journalArticle

35 Scopus citations


Research on governance has focused on large corporations, giving far less attention to smaller and younger companies especially those moving from founder-controlled start-ups to professionally managed public companies. Emphasizing founder-involved firms (i.e., firms that are floated by their original founders), this article examines interlinks between founders' prestige and selection of inside and outside directors, and short-term performance measured in terms of IPO "underpricing." The results provide evidence of positive association between founders' and directors' prestige, but there is substitution between inside and outside directors' prestige. Top management team's external board experiences reduce IPO underpricing.

Original languageEnglish (US)
Pages (from-to)319-335
Number of pages17
JournalEntrepreneurship: Theory and Practice
Issue number2
StatePublished - Mar 1 2011


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