IPO survival and CEOs’ decision-making power: The evidence of China

This research examines the impact of a CEO's (Chief Executive Officer) decision-making power on a firm's survival after an initial public offering (IPO), using data from the period 2001–2011 in China. Following the CEO literature which argues that CEO traits are related to a firm's performance, I find that the CEO who has power over the board as a consequence of her/his status as a founder decreases the probability of delisting, whereas her/his status as the board's sole insider and concentration of the title in the hands of the CEO increases the likelihood of delisting. Moreover, the results suggests that firms with higher CEO ownership power, older, more industry experience, and highly educated CEOs, and with those who have the same nationality as the company, are more likely to survive after taking IPOs, but that firms with CEOs who also chair their boards are less likely to survive. The results also show that firms with powerful CEOs generate negative announcement date excess returns.