This study examines the relationship between board characteristics and the
likelihood that newly public firms will be acquired. Drawing upon signaling and
agency theory, this study considers the influence of various board characteristics in
addressing the information asymmetry and agency issues faced by potential acquirers
of newly public firms. In doing so, this study extends the focus of research on a unique
form of entrepreneurial harvest, public dual tracking. In order to test study hypotheses,
we conducted logistic regression on a sample of 175 newly public firms that underwent
initial public offerings (IPO) in the U.S. during the calendar year of 2007. Study results
provide moderate support for study hypotheses. First, no support was found for a
relationship between the percentage of outside directors and the likelihood of newly
public firms being acquired. Second, Chief Executive Officer (CEO) duality was found
to be negatively related to the likelihood of a newly public firms being acquired. Third,
opposite the hypothesized effect, study results suggest that the presence of women
directors is negatively related to the likelihood that newly public firms are acquired.
Finally, study results suggest a weak positive relationship between board size and the
likelihood of newly public firms being acquired.
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