Can corporate governance, as a signal of the level of agency cost, have an impact on IPO underpricing? A study on 115 Swedish IPO firms

Abstract: This thesis investigates whether corporate governance can signal the level of agency costs and have an impact on the IPO underpricing. By researching 115 Swedish IPO firms between the years 2000 and 2019, the study conducts a number of multiple variable regressions using four board structure variables. The study finds statistically significant relationships between the share of females on the board and underpricing, supporting the hypothesis that risk-aversion among women increases the amount of agency costs at the time of the IPO. Further findings show a statistically significant relationship between board member tenure and IPO underpricing, supporting the theoretical prediction that newly appointed board members reduce the level of agency costs in a firm.