ESG government risk and international IPO underpricing

By E. Baker, Thomas J. Boulton, Marcus V. Braga‐Alves, Matthew R. Morey. Journal of Corporate Finance, 2021

184 citations recorded by the source corpus.

Abstract We study the association between environmental, social, and governance (ESG) government risk management and firm-level IPO underpricing between 2008 and 2018. Examining 7446 IPOs issued in 36 countries, we find that IPO underpricing tends to be lower in countries with higher ESG Government Ratings. When we uniquely examine the environmental, social, and governance pillars, we find that underpricing tends to be lower in countries with stronger risk management practices in each of these areas. Additional analysis indicates that IPO underpricing as it relates to ESG Government Ratings is more pronounced in countries with more transparent financial disclosures, higher liability standards, and stronger shareholder protections.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/92ce95f3bad79cdd78b89ffc9dfb5d21511176f5