Impact of Governance Structures on IPO Performance in Emerging Markets: Evidence from Bangladesh

This study examines the effects of governance and ownership structures on the IPO performance in emerging markets. We develop a framework for the IPO performance in emerging markets building on the integration of agency, institutional, and signaling theories. We find that unlike developed markets, in emerging economies, outside owners have a positive effect on IPO valuation while blockholder owners have curvilinear relationship with IPO valuation. In line with signaling influences in developed markets, institutional ownership in emerging markets also has a positive effect on IPO valuation. Finally, we find interaction effects of blockholder ownership on our main effects. This paper contributes to the International Entrepreneurship and Strategy literatures by providing a more complete picture of the effect of corporate governance and ownership structures on IPO firm performance in the context of emerging markets.