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Publication in the Journal of Banking & Finance

Publication in the Journal of Banking & Finance


Dr. Gerrit Köchling, Dr. Daniel Neukirchen, Prof. Dr. Peter N. Posch, and Prof. Dr. Douglas Cumming publish their paper "How does corporate culture affect IPO price formation?" in the Journal of Banking & Finance.

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We examine the relationship between corporate culture and initial public offering (IPO) price formation. Using a sample of 935 US IPOs and data on corporate culture from Li et al. (2021b), we find that IPOs of strong culture firms are associated with more positive price revisions and higher initial returns, i.e., more underpricing. These findings hold using an alternative measure of corporate culture, matched samples, and a large set of control variables. Consistent with key theories, the effects appear to be driven by underwriters deliberately compensating investors for revealing information about their perceptions of the firm's culture during bookbuilding.

Cumming, D., Köchling, G., Neukirchen, D., & Posch, P. N. (2024). How Does Corporate Culture Affect IPO Price Formation?. Journal of Banking & Finance, 107158.