The impact of ownership and advisors on IPO and post-IPO performance

Abstract

This dissertation focuses on the impact that the advisory team, namely underwriting bank and auditor, private equity investors and firms owners have on firms IPO and post-IPO performance in a bank-oriented system like Italy. The decision of a firm to go public posits many important problems, among which there are how to reduce information asymmetries and uncertainty surrounding private firms and how to preserve and improve firms value. The phenomenon is analyzed using the signaling theory, a relative recent theory and one of the main used in the IPO literature, which aims to resolve the information asymmetry problem suggesting to rely on certain indicators that can send signals to the market about the quality of firms. Another important theory applied to the IPO context is the agency theory, as the separation of ownership and control posits problems to firms profitability and value. Both theories have been largely applied to the US context and the goal of this dissertation is to contribute to these long-standing debates by adding evidence from a non-US country. Evidence from foreign countries has shown that institutional settings are important to consider when generalizing theories. This dissertation confirms this thesis, showing that signals are not always correctly perceived and valued by the market, and that theories may not work in different contexts.