Tournament incentives and IPO failure risk

Çolak, Gönül; Gounopoulos, Dimitrios; Loukopoulos, Panayiotis; Loukopoulos, Georgios

doi:10.1016/j.jbankfin.2021.106193

Cited by 15 publications

(5 citation statements)

References 121 publications

(184 reference statements)

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“…Thanh found that when the macro economy is in a highly uncertain period, the IPO pass rate will decrease [14]. Colak's research found that the intensity of internal promotions and the salary gap at different levels of the company can also affect the success or failure of IPOs [15].…”

Section: Literature Reviewmentioning

confidence: 99%

Analysis of the Failure of Himalayan Companies' Initial Public Offering

2024

AEMPS

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With the increasing demand for consumer virtual entertainment products, the network audio industry has ushered in huge development opportunities. At the same time, having sufficient funds is a necessary prerequisite to ensure that companies in the network audio industry seize opportunities and take the lead in seizing the market. Subsequently, more and more companies in the network audio industry are seeking to raise funds through initial public offerings. However, the network audio industry is a content provider based on the Internet, which has characteristics such as high initial investment and long profit cycles, resulting in lower IPO pass rates than the overall level. This study delves into the reasons for the IPO failure of Himalayan companies and further proposes specific countermeasures. Finally, based on the case of Himalayan companies, the article provides some suggestions for other network audio industry companies that want to go public and raise funds.

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Section: Literature Reviewmentioning

confidence: 99%

Analysis of the Failure of Himalayan Companies' Initial Public Offering

2024

AEMPS

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“…Colak, Gounopoulos, Loukopoulos, and Loukopoulos (2021) examined the prediction that higher tournament incentives significantly reduce the likelihood of IPO failure risk. They show that an interquartile change in the CEO pay gap distribution translates into a failure risk probability decline of approximately 27%.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Poison pills adoption, real earnings management and IPO failure

Trabelsi¹,

Chalwati²

2023

CAFR

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PurposeThis paper examines the relationship between poison pills, real earnings management and initial public offering (IPO) failure.Design/methodology/approachThe authors sampled 2,997 IPO firms that went public during 1993-2015.FindingsThe authors find that IPO firms manipulate earnings upward using real earnings management. The authors also find that IPO firms exhibiting a higher level of real earnings management have a higher probability of IPO failure. In addition, the authors find that weak shareholders' governance is positively associated with IPO failure.Practical implicationsThese results suggest that poor governance structures in failed firms open the door to manipulating real activities and increasing operational risk.Originality/valueThe study findings are of most significant interest to potential investors and other stakeholders affiliated with a firm going public, an auditor, an underwriter, the lawyers who consult with the firm and employees or executives who might consider joining that firm.

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“…Researchers have also examined enterprise risk in more detailed aspects, Colak et al (2021) examined the impact of the vertical compensation gap between CEOs and other executives on initial public offerings (IPOs) failure risk based on a sample of companies from the Thomason One Banker database for the period 2000-2012, and the results of the study proved that tournament incentives for executives are effective and can reduce the likelihood of IPO failure and improve the chances of IPO survival. However, some of the research supports the equity theory, Le, Nguyen and Gregoriou (2022) find that widening the pay gap between CEOs and their key subordinate executives increases a company's risk of future stock price crash, using a sample of listed companies in the eight largest stock markets (the U.S., the UK, Canada, France, Germany, Australia, New Zealand and Belgium).…”

Section: Industry Tournament Incentivesmentioning

confidence: 99%

A Systematic Review on the Executive Compensation Gap and Its Multiple Impacts on the Company

Malan,

Yingkun,

Kamaruddin

2023

IMBR

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In recent years, the public has begun to pay attention to the compensation gap of executives, in such a background of social reality, this researcher conducts a systematic review of the executive compensation gap (horizontal gap and vertical gap) and its impacts on the company through the review and summary of the empirical studies of Scopus Indexed journal articles for the last decade of 2013-2022, then this study figure out the literature trend in this research area in the last decade, summarized how the literature measure executive compensation gap, then reviewed the impact of executive compensation gap can have on company (company performance, risk management, innovation ability, audit fees and other aspects), and at last summarized the findings and put forward the suggestion for future researchers. Such research fills the gap of a systematic review of the executive compensation gap and its impact on companies and provides the company compensation plan maker with practical evidence.

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Tournament incentives and IPO failure risk

Cited by 15 publications

References 121 publications

Analysis of the Failure of Himalayan Companies' Initial Public Offering

Analysis of the Failure of Himalayan Companies' Initial Public Offering

Poison pills adoption, real earnings management and IPO failure

A Systematic Review on the Executive Compensation Gap and Its Multiple Impacts on the Company

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