This study investigates the mechanisms of Corporate Governance and Initial Public Offerings (IPO’s) short-term performance during the years of 1383 to 1389 in which the period of two months post-IPO has been considered and analyzed. Initially the average return of the IPO has been compared with the return of the Market index during a two month period after the IPO date. The results demonstrate the fact that the return of IPOs is higher than the return of the Market Index for the same period. This phenomenon is known as IPO Underpricing which leads to abnormal higher returns for their buyers. Subsequently the impact of corporate governance mechanisms, through three variables of: Board of director’s size, Independent member ratio and the separation of the CEO and Chairman, on gaining higher returns for IPOs compared to Market Index returns were examined individually and mutually. The results show that: There is no significant relationship between the Board size and Underpricing. There is a significant relationship between the independent members’ ratio and Underpricing. There is a significant relationship between the separation of the CEO and Chairman and Underpricing. There is a significant relationship between Corporate Governance mechanisms and Underpricing.
Talebnia G, Pourbahrami M. The Investigation of Corporate Governance Mechanisms and Short Term IPO Performance in TSE's Listed Companies. 3 2012; 2 (1) :135-156 URL: http://mta.raja.ac.ir/article-1-64-en.html