The impact of governance on IPO underpricing and performance at the country and corporate level: Literature review and research directions

We update and review the current literature on IPO underpricing and performance, stressing the link with corporate governance at the country and firm-level. We focus on the separation between ownership and control and the signaling that firms' governance structure could send to the IPO market. It is clear from this review that improvements in governance institutions tend to reduce underpricing and affect IPO performance positively, but it is not entirely clear how governance at the firm level could impact IPOs' underpricing and performance. As shown, there are many interesting avenues for further research in this area.