CEO Social Capital, Board Connectedness, and Anchor Investors: A Study of Initial Public Offerings

Document Type

Article

Source of Publication

Corporate Governance an International Review

Publication Date

12-3-2025

Abstract

Research Question/Issue: This study investigates the role of CEO social capital, director networks, and anchor investor participation in influencing the short- and long-term performance outcomes of initial public offerings (IPOs) in the Hong Kong stock market. Research Findings/Insights: Studying a sample of 1155 IPOs listed in Hong Kong from 2004 to 2019, we find that highly connected CEOs and boards significantly enhance short-term IPO performance as measured by demand multiples. We find that anchor investors' participations strengthen the positive performance of the IPO firms. We show that the positive effects of CEO and board networks are beyond the short-term outcomes and significantly contribute to enhanced operating performance, higher market-adjusted returns, and higher survival rates post listing. These results are robust to endogeneity concerns and shed further light on the value of social capital and anchor investors' participation for IPO firms. Theoretical/Academic Implications: This study advances corporate governance research by highlighting the critical role of social capital in IPO success, particularly for a well-regulated market outside the United States and Europe. It extends the literature on board and executive networks by demonstrating their complementary relationship with institutional investors, such as anchor investors, in enhancing both short- and long-term IPO outcomes. Practitioner/Policy Implications: The findings underscore the importance of leveraging CEO and board networks alongside unique institutional (i.e., anchor) investors to boost IPO success. Policymakers and stock exchange regulators can draw on these insights to design regulatory frameworks that foster stakeholder collaboration, reduce information asymmetry, and promote better governance practices in IPO markets.

ISSN

0964-8410

Publisher

Wiley

Volume

34

Issue

1

First Page

208

Last Page

232

Disciplines

Business

Keywords

anchor investors, corporate governance, demand multiple, initial public offering (IPOs), social capital, social networks

Scopus ID

105023840547

Indexed in Scopus

yes

Open Access

no

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