The Effects of a CEO's Educational Background on the Choice of IPO Location

Drawing on upper echelons theory, this paper examines the role CEOs’ educational backgrounds play in their firms’ choice of domestic versus foreign IPO location. Our sample consists of the entire population of 1,800 Chinese issuers during the period from 2005 to 2014 with hand-collected data extracted from company prospectuses. Our results indicate the influence of CEOs’ formal education on their firms’ IPO location choice such that CEOs with a prestigious Chinese degree then to list their firms in China while those with a foreign degree tend to list overseas. Furthermore, how far CEOs’ preferences can be reflected in firms’ final decision depends on how much power they have and how long they have occupied their postions. Our results are robust to alternative measurements and endogeneity tests.