CEO Education and the Ability to Raise Capital

Gounopoulos, Dimitrios; Loukopoulos, Georgios and Loukopoulos, Panagiotis (2018). CEO Education and the Ability to Raise Capital. In: European Accounting Association 2018: Annual Conference, 30 May - 1 Jun 2018, Milan, Italy, pp. 1–42.



We examine whether heterogeneity of CEO academic qualifications matters in explaining the performance of Initial Public Offerings (IPOs). We find that CEO education attainments perform a signaling role which depends not only on the level but also on the major of education. Specifically, we show that, irrespective of the level of academic achievements, IPO investors have a preference for top managers with practice or business oriented degrees as opposed to liberal arts degrees. Importantly, our findings suggest that both the level and quality of education training tend to reduce IPO underpricing, and this effect is less pronounced for less specialized degrees.

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