Employee welfare, social capital, and IPO survival

Accounting & Finance – Research Seminar

03 November 2021, 13.00 – 14.00, Zoom

Guest Speaker: Shima Amini, Leeds University Business School

Abstract:

This paper examines the impact of employee welfare and social capital on IPO survival. Using a sample of IPOs listed in the US from 2000 through 2016 and tracking to the end of 2018, we find that employee welfare and social capital have a positive impact on survival times. Specifically, we find IPOs associated with better employee welfare and located in a county with enhanced social capital, survive longer after the initial listing. Our results show that the influence of employee welfare on survival time is stronger when the county is associated with better social capital. Further tests reveal that the positive effect of employee welfare and social capital is driven by the diversity among employees and the number of charitable organisations located in the county of the IPO firm. Overall, our results are robust to endogeneity and various model specifications.

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