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Signaling value of top management team

Signaling value of top management team The purpose of this paper is to integrate the upper echelon theory with signaling theory and examine the impact of top management team (TMT) on the initial public offering (IPO) performance of Chinese firms in the USA.Design/methodology/approachThis study used Security Data Corporation (SDC) that is a central database for foreign IPOs in the USA. The authors identified 142 Chinese firms that issued stocks on the US markets between 2003 and 2014. This study used firm’s final prospectuses to collect data manually.FindingsThis study finds that the TMT characteristics such as functional heterogeneity and international exposure convey the positive signal of firm’s legitimacy to the US investors and increase the IPO performance.Originality/valueThis study extends the upper echelon perspective that has previously overlooked the signaling value of TMT characteristics in the foreign IPO studies. The top management plays an important role to the firm’s successful foreign market listing. Since China joined the WTO in 2001, a large number of Chinese firms have started IPOs in the USA, but there is a dearth of research on these firms. This study aims to contribute to the study of international business and management and describes that the TMT functional heterogeneity and international exposure have a significant role in the success of Chinese foreign IPOs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Chinese Management Studies Emerald Publishing

Signaling value of top management team

Amin, Muhammad; Wu, Jianfeng; Tu, Rungting
Chinese Management Studies , Volume 13 (3): 19 – Jul 31, 2019
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References (97)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1750-614X
DOI
10.1108/cms-04-2017-0097
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to integrate the upper echelon theory with signaling theory and examine the impact of top management team (TMT) on the initial public offering (IPO) performance of Chinese firms in the USA.Design/methodology/approachThis study used Security Data Corporation (SDC) that is a central database for foreign IPOs in the USA. The authors identified 142 Chinese firms that issued stocks on the US markets between 2003 and 2014. This study used firm’s final prospectuses to collect data manually.FindingsThis study finds that the TMT characteristics such as functional heterogeneity and international exposure convey the positive signal of firm’s legitimacy to the US investors and increase the IPO performance.Originality/valueThis study extends the upper echelon perspective that has previously overlooked the signaling value of TMT characteristics in the foreign IPO studies. The top management plays an important role to the firm’s successful foreign market listing. Since China joined the WTO in 2001, a large number of Chinese firms have started IPOs in the USA, but there is a dearth of research on these firms. This study aims to contribute to the study of international business and management and describes that the TMT functional heterogeneity and international exposure have a significant role in the success of Chinese foreign IPOs.

Journal

Chinese Management Studies – Emerald Publishing

Published: Jul 31, 2019

Keywords: Upper echelon theory; Foreign IPO performance; Top management team characteristics

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