Outside directors' experience, TMT firm-specific human capital, and firm performance in entrepreneurial IPO firms

Drawing on the behavioral agency perspective and entrepreneurship literature, we examine the impact of board configuration at the time of an IPO on top management team (TMT) firm-specific human capital, and firm performance in young IPO firms. The results show that the ratio of outside directors at...

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Bibliographic Details
Published in:Journal of business research 2013-04, Vol.66 (4), p.533-539
Main Authors: Le, Son A., Kroll, Mark J., Walters, Bruce A.
Format: Article
Language:English
Subjects:
Board composition
Board of directors
Entrepreneurs
Entrepreneurship
Financial performance
Human capital
Initial public offerings
Investment analysis
Management theory
Organizational behaviour
Outside directors
Personal finance
Post-IPO performance
Small and medium sized enterprises
Studies
Top management teams
Young IPO firms
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Summary:Drawing on the behavioral agency perspective and entrepreneurship literature, we examine the impact of board configuration at the time of an IPO on top management team (TMT) firm-specific human capital, and firm performance in young IPO firms. The results show that the ratio of outside directors at the time of an IPO has a positive relationship with the attrition of TMT firm-specific human capital in the first two years following the IPO. Outside directors' industry- and firm-specific experiences negatively moderate this relationship. Finally, our study provides evidence that TMT firm-specific human capital attrition negatively affects subsequent firm performance.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2012.01.001