Nexus of corporate governance, political stability and Performance: Evidence from IPOs of an emerging economy

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Material and Methods The data used in this study were obtained from the annual reports of IPO-listed firms in Pakistan between 2008 to 2022. We used different methods such as regression analysis, random effect model, and GMM methods in the analysis process. Findings and Conclusion : Our results show that an independent board has a significant positive relationship with performance. Moreover, board size has both a negative and positive relationship with the performance of the IPOs. Gender diversity has a significant positive relationship with IPO performance. Moreover, the age of the firm has a significant positive relationship with IPO performance. Political stability within the country has a positive relationship with IPO performance, whereas the political instability decreases the performance and vice versa. Policy Implications: This study provides practical implications to the government and investors; the government makes a code of corporate governance to increase the number of corporations by improving their Initial return and Investors use the study to evaluate the corporation with an effective code of corporate governance for protecting their investment. Corporate Governance Initial Public offering GMM method and Pakistan Figures Figure 1 1. Introduction The performance of initial public offerings (IPOs) is a topic of great interest and scrutiny in the financial and investment world. This interest derives from the exciting challenge offered by the diversity of IPO rules and regulations across markets and jurisdictions. Each market may have its own set of rules and procedures in terms of disclosure requirements, investor protection, and corporate governance norms, resulting in a complicated and varied landscape for companies looking to go public. Understanding the impact of these different norms on IPO performance is important because it affects not just investment decisions but also market efficiency, cross-border capital flows, and the global economy. As a result, analyzing norm deviations and their implications for IPOs can give significant information for investors, legislators, and others. Corporate governance practices in emerging economies have a substantial impact on the performance of IPOs (Watanabel, Yamauchi, & Sakawa, 2022 ). Weak corporate governance raise worries about transparency, accountability, and shareholder rights protection, potentially discouraging investors from engaging in IPOs (Wynant, Manigart, & Collewaert, 2023 ). Recent research, such as Hsu and Liao ( 2022 ) and Tapa and Mazlan ( 2022 ), has emphasized the negative impact of poor corporate governance on IPO performance in emerging countries, where regulatory frameworks and enforcement may be weaker than in developed economies. According to Al-Masawa, Mohd-Rashid, Al-Jaifi, and Al-Duais ( 2022 ), strengthening corporate governance rules and practices in these regions is critical for encouraging investor confidence, facilitating capital flows, and assuring the long-term success of IPOs. The performance of IPOs in emerging countries is definitely vulnerable to the effects of political insecurity, which is a widespread issue in many regions. Political unrest lead to increased regulatory ambiguity, a loss of investor confidence, and potential commercial interruptions (Mejia & Aronstein, 2022 ). Several researchers such as Sukaesih Kurniati and Suryanto ( 2022 ) and Gómez-Mejía et al. ( 2023 ), have found a link between political insecurity and poor IPO success in emerging nations. Understanding and resolving these political stability concerns is crucial for both investors and businesses when evaluating the risks and potential associated with IPOs in these locations, making it a significant concern in the context of emerging market investments. However, the study of the influence of corporate governance and political instability on IPO performance in Pakistan differs from that of other emerging nations due to the unique combination of factors at play in the country. Pakistan faces specific challenges and opportunities that set it apart from its peers, making it imperative to conduct a separate examination. Pakistan has experienced a distinct pattern of political instability, with frequent changes in government and fluctuating political environments. Zeeshan, Rehman, Ullah, Hussain, and Afridi ( 2022 ) highlight the country's volatile political landscape. The effects of this instability on corporate governance and IPO performance may differ from other emerging economies, necessitating a specific study. Pakistan's geopolitical location and relationships with neighboring countries such as India and Afghanistan present distinct economic and political challenges. The importance of understanding the impact of regional geopolitics on Pakistan's economic stability is highlighted by Ismail and Husnain ( 2022 ). Pakistan's stock market and regulatory framework have their unique quirks. Jamaani, Alidarous, and Alharasis ( 2022 ) highlighted market-specific developments, such as legislative changes and IPO activity, that necessitate more examination to understand their impact on IPO performance. Pakistan is confronted with various economic issues, such as inflation and fiscal deficits, which can interact with corporate governance and political instability. Mehmood, Alsmady, Amin, Mohd-Rashid, and Aman-Ullah ( 2023 ) thrown light on these problems and their implications for IPO performance. However, examining corporate governance standards in the context of political instability is a top priority in emerging economies for several compelling reasons. Political insecurity in these places, which is frequently characterized by frequent changes in leadership, shifting policy directions, and regulatory uncertainty, can have a significant impact on the economic environment. According to Salehi, Ammar Ajel, and Zimon (2022), this insecurity lead to governance issues, limiting transparency and accountability. Furthermore, in such circumstances, corporations may face temptations to engage in rent-seeking conduct or traverse a complex web of political ties, which can erode the norms of good governance. Understanding the delicate connection between corporate governance and political instability is critical for investors and corporations, as well as policymakers aiming to promote economic stability and encourage investment in these rising economies. Hence, with the motivations of some influencing factors of the initial public offering, we looked forward to this research issue in our study. There is a considerable research gap in the complete assessment of how various board characteristics and political instability affect the performance of IPOs listed on the Pakistan Stock Exchange. While previous research has looked at the impact of corporate governance and political stability on IPO performance in developed economies, there is no research that looks at the complex interaction of these two elements in the context of Pakistan, where economy faced different aspect of troubles with their financial indicators. The investigation of the political instability in term of emerging economy motivates the researchers for evaluation the relationship and consequences of political instability on IPO performance that create another research gap for investigation of Pakistan stock market listed firms. Investigating this relationship could provide useful insights into the unique challenges and opportunities that IPOs face in a politically volatile emerging economy. Such research will help to develop more effective corporate governance frameworks tailored to the needs of companies operating in regions with similar challenges by identifying how board characteristics influence firms' ability to navigate political instability and maintain good governance. Moreover, previous studies use only the regression analysis and cointegration methods but does not provide accurate methodology to justify their result robustness that create another interesting research gap for investigation, but this study use Generalized method of movement (GMM) for robustness of the findings. This research aims to elaborate dynamics between board characteristics of corporate governance practices, the continually sprouting landscape of political instability, and IPO performance in Pakistan. However, our objectives are to investigate the effect of the board characteristics such as board size, board independence, CEO duality and gender diversity on the IPO performance that listed in Pakistan Stock exchange. Another objective includes is to investigate the impact of the political instability on the IPO performance in emerging economy especially in Pakistan. Moreover, by examining these elements, we want to gain a better understanding of how they affect the performance of IPOs on the Pakistan Stock Exchange. Similarly, our research seeks to investigate the board characteristics and corporate governance techniques that enable IPOs to not only prosper but also preserve long-term sustainability in the face of political turbulence. By identifying these best practices, we hope to give actionable insights for entrepreneurs, politicians, and investors seeking success in Pakistan's tough economic environment. Finally, the goal of this research is to contribute to Pakistan's economic flexibility by creating higher corporate governance norms that can resist political upheaval. Moreover, our goal is to promote a more strong and appealing IPO market, opening the path for sustainable economic growth in the region, through a better understanding of the delicate relationship between boards, governance practices, and political stability. This paper contributes to existing theory and literature in several significant ways. First, it offers empirical evidence on the relationship between board characteristics, political stability, and IPO performance in emerging economies, particularly Pakistan which shows different findings as compared with other nations due to the volatility in firms' stock returns due to the high political instability from the last decades and declining consecutively due to that factor. Second, this study expands upon the existing literature by exploring additional board characteristics, such as gender diversity and CEO duality, with IPO performance, Pakistan the code of the corporate governance mechanism strongly follows gender diversity in their code and timely improved their code of corporate governance concerning time for getting the benefits of the gender divert in the business, as finding suggested that the women in the board composition leads to perform well and contributed a favorable efforts towards IPO positions. Third, the study adds to the literature on the understudied area of the relationship between political stability and IPO performance, in Pakistan there is volatile politics due to the flexibility in changes the democrats political party for getting the advantages personally. Our findings suggested that political instability within the economy leads to a decrease the investor confidence in the stock markets which leads decrease in the foreign and domestic flow of capital due to political unrest creating trouble for the new IPO for their trading the shares and maintaining their capitalization. Fourth, the study contributes to the literature by employing robust analytical measures to assess IPO performance across multiple dimensions, providing a more comprehensive understanding of the impact of board characteristics and political stability on IPO performance. The different dimensions provide the magnitude and directions of the IPO performance for the long and short run which is useful for forecasting the short- and long-term investment decisions for the investors in different environments. Furthermore, this study has implications for policymakers and regulators in terms of crafting policies to maintain political stability within the economy. This study provides practical implications to the government and investors, The government makes a code of corporate governance to increase the number of corporations by improving their Initial return and Investors use the study to evaluate the corporation with an effective code of corporate governance for protecting their investment. Moreover, this study also advocates great implications for the researchers, stakeholders, and regulators. The rest of the paper organized as section 2 discusses theoretical and empirical literature with the directions of the hypothesis useful for investigation. Section 3 discusses methodology including data and sampling, variables measurement and the econometric model of the study. Section 4 is related to the analysis and findings. Moreover, the discussion is also illustrated in section 4. Section 5 is related to the conclusion and policy implications. 2. Literature review and hypothesis development. 2.1 Theoretical literature review Several related theories help to explain the impact of board characteristics and political instability on IPO performance. Board characteristics, such as board independence and CEO duality, can influence the level of monitoring and oversight provided by the board, which can in turn affect the agency costs associated with the IPO process (Musa, Abdul Latif, & Abdul Majid, 2023). Agency theory is a useful framework for understanding the relationship between board characteristics and IPO performance (Gwala & Mashau, 2023 ). According to agency theory, conflicts can result in agency costs, which are the costs incurred by the firm as a result of managing these conflicts. In the context of IPOs, the board of directors plays an important role in overseeing the IPO process and ensuring that the interests of shareholders are protected (Shao, 2023 ). Resource dependence theory suggests that firms rely on resources and support from external factors, such as investors and regulators that may rise to performance of the organization (Guan, Ding, Zhang, & Verny, 2023 ). As a result, the political instability may affect the availability and quality of these resources, which have a direct impact on IPO performance. Resource dependence theory is relevant for understanding the relationship between political instability and IPO performance because it highlights the importance of external resources for firms to succeed. Political instability can negatively impact the availability and quality of external resources, such as financing, permits, and contracts, which can in turn negatively impact IPO performance (Zhu & Chu, 2023 ). Institutional theory proposes that organizations are shaped and influenced by the prevailing norms, values, and expectations of the wider institutional environment in which they function (Bruton, Ahlstrom, & Li, 2010 ). In the context of corporate governance and IPOs, the institutional environment can influence the adoption and effectiveness of governance practices, such as board characteristics. Institutional theory is relevant for understanding the relationship between board characteristics and IPO performance because it highlights the importance of institutional frameworks, including regulations and norms, that shape the behavior and decisions of organizations (Moore, Bell, Filatotchev, & Rasheed, 2012 ). Institutional theory suggests that board characteristics can impact IPO performance through their influence on organizational practices and compliance with institutional governance (Zhao, Fisher, Lounsbury, & Miller, 2017 ). Scholars and practitioners from a variety of disciplines have conducted substantial research into the relationship between internal corporate governance mechanisms and a company's overall performance but there is limited study on the IPO performance. According to agency theory, independent directors often assume their oversight responsibilities with a focus on protecting the interests of external shareholders, hence reducing agency conflicts (Boachie, 2023 ). (Lepore, Landriani, Pisano, D’Amore, & Pozzoli, 2023 ) underline that independent directors are characterized by their objectivity and independence, motivating them to carry out their responsibilities with a strong commitment to shareholder interests, which effectively diminishes information asymmetry. The substantial contribution of independent directors lies in their ability to align with shareholder interests, playing a pivotal role in mitigating information asymmetry. The expertise of a board of directors is critical for IPO enterprises, especially when their assistance is critical in leading companies through high complexity and unpredictability. Furthermore, in the book-building process, the expertise of board members becomes critical in establishing the ultimate IPO offer price. These board members' knowledge strengthens the legitimacy of the accounting information offered in the prospectus, inspiring trust in underwriters and prospective investors. However, larger board size increases the decision-making power that is useful for the IPO for the price adjustment (Lee & Ko, 2022a ). CEO duality, in which the same person serves as both the CEO and Chairman of the Board, has the potential to reduce a company's performance due to the inherent risks associated with a lack of independent monitoring and accountability (Lam & Lee, 2008 ). This structure may generate conflicts of interest, limit the board's capacity to hold the CEO accountable, limit variety of decision-making perspectives, and even create perceptions of poor governance standards. Such issues may impede long-term strategy planning, risk management, and shareholder value maximization, thereby undermining the company's overall effectiveness and performance. According to Kazmi, Imran, Farooqi, and Shahid ( 2022 ), Pakistan's overall performance has suffered as a result of political instability. Changes in government leadership on a regular basis, civil-military tensions, and persistent political upheaval have created an unpredictable business environment, inhibiting both domestic and foreign investment. As a result of this insecurity, policies have been inconsistent, regulatory changes have occurred, and there has been a lack of commitment to long-term economic planning. Furthermore, security worries and regular disturbances, such as strikes and protests, have had a negative impact on economic activity and investor confidence. These difficulties, together with issues such as corruption and inadequate infrastructure, have stifled economic growth, restricted job possibilities, and harmed the country's overall performance, making it less appealing for long-term business and economic development. 2.2 Empirical Literature Review and Hypothesis development. There are limited studies on the relationship between board characteristics, political instability and IPO performance especially in emerging economy, but some studies are helpful for providing expected directions of the dynamics between them. There is much evidence in previous literature about the board independence studies (Githaiga, Muturi Kabete, & Caroline Bonareri, 2022; Singh, Singhania, & Sardana, 2019 ; Watanabel et al., 2022 ). According to Pucheta-Martínez and Gallego-Álvarez ( 2020 ), the performance of the company is positively correlated with the independence of the board. Byrd and Hickman ( 1992 ) investigated that organizations with more independent board members had better revenues than those with fewer independent board members in the tender offer. (Cotter, Shivdasani, & Zenner, 1997 ) examined comparative results to show that firms with board independence are rewarded with high percentages of securing proposals. In the meanwhile, numerous investigations have been unable to detect a strong relationship between the independent board and firm performance. Hermalin and Weisbach ( 1991 ) use Tobin's Q to measure the impact of board independence on organizational performance and the relationship between the two variables. According to Dwaikat, Queiri, and Qubbaj ( 2020 ), independent boards increase the performance of the Initial public offering. Similarly, Githaiga et al. ( 2022 ) investigated that the independent board decreases earning management and performance. Therefore, the board of directors must perform several enormous jobs and obligations during the IPO process. These include facilitating the company's access to external capital for growth, improving the company's reputation to improve competitive advantage, developing a network of contacts, and advising the company on the strategic directions required for long-term survival and success (Le et al., 2023 ). As a result, an independent board is projected to increase IPO performance. From the literature and theory mentioned above, we came up with the following hypothesis, H1 There is a positive effect of board independence on IPO Performance. More recently, academics have tried to look at the effects of board gender diversity on the performance. The gender diversity has essentially been the focus of attention among decently diverse groups (Cenarro, 2023 ). Female CEOs will express resources made available to them by the ideals of their gender, just as each board member conveys particular sources to the association, such as talent, competence, information, and connections outside the association (Napoli, 2023 ). According to Tao-Schuchardt and Kammerlander ( 2023 ) that the performance of the organization increases due to inclusion of the women in the board composition due to the strong opinions. The existence of women broadens the ability pool, which empowers organizations to profit by the more noteworthy decisions among capable individuals (Biggerstaff, Campbell, & Goldie, 2023 ). According to Kirk and Gwin ( 2009 ), women in the board composition can make better quality decisions and the quality of policy implementation within organizations. Woolley, Chabris, Pentland, Hashmi, and Malone ( 2010 ) investigated that women as board members can have a greater ability to think power and improve the knowledge gained from the whole data collection and should also be appropriate for the board of executives. Cabrera-Luján et al. ( 2023 ) investigated that boards with gender diversity were required to focus on clear communication with employees, demand customer loyalty, and consider decent variety and corporate social responsibility. From the perspective of institutional theory, De Masi and Slomka-Golebiowska ( 2023 ) investigated that corporations achieve authenticity by promoting women to important board positions and that their essence serves as a flag that a firm values the dedication of its women employees. The effects and influences of gender representation on the board's components have been examined in previous studies (Alhosani & Nobanee, 2023 ; Hussain, García-Sánchez, Khan, Khan, & Martínez‐Ferrero, 2023 ). According to a Grabham ( 2023 ) investigation, a range of arguments are made to increase board effectiveness, and it is also suggested that male and female directors' moral practices differ significantly. Moreover, studies imply that women are more risk averse and Adams, Attah-Boakye, Yu, Johansson, and Njoya ( 2023 ) reasoned that female CEOs were constantly taking risks compared to their male companions. As a result, gender diversity is projected to increase IPO performance. Considering previous theoretical and literature background, we developed the following hypothesis, H2 There is a Positive effect of gender diversity on IPO performance. The size of a board reflects a company's ability to manage its contractual landscape, indicating its ability to secure and exploit critical external resources, such as external investment. This, in turn, has an impact on the overall performance of the company (Morkan, Bertels, Sheth, & Holahan, 2023 ). A greater board size is consequently expected to improve business performance (Samara & Yousef, 2023 ). This positive effect arises from the fact that each board member brings their own unique experience to the table, bringing a varied variety of abilities that can improve a company's performance, particularly in the aftermath of a financial crisis (Tejerina-Gaite & Fernández-Temprano, 2021 ). The impact of larger boards on business performance is linked to their ability to assign work based on each board member's individual competence. As a result, a larger board size is projected to increase IPO performance. On the opposite side, (Irhamni, 2021 ) conducted a study on IPO Indonesian capital market from 2012 to 2017 and discovers a negative association between board size and IPO underpricing. These findings imply that board size is a corporate governance indicator that aids in the reduction of information asymmetry. Larger boards may give favorable signals to the market in instances with high information asymmetry, reducing the compensation required by issuers during IPOs. Moreover, Coles, Daniel, and Naveen ( 2008 ) investigated the positive significant impact of board size on the performance of the organization. In consideration of previous research, we came up with the following hypothesis, H3 There is a positive effect of the board size on IPO Performance. The CEO duality has some critical results on the organization's performance. According to Chahine and Tohmé ( 2009 ), CEO duality has negative consequences on the performance of the organizations due to the burden and cannot take decisions on time. Lee and Ko ( 2022b ) has also similar arguments related to the CEO duality that create the different problems for the organization. While, Erikson, Coleridge, and Bjornali ( 2022 ) investigated that CEO duality has a positive impact due to increased performance based on the accurate problem discussion of the management and internal control. The primary responsibility of the board is to represent the interests of the shareholders and monitor the executive's operations (Garvey & Swan, 1994 ). The board's objective is to support and speak for the guidelines, therefore the CEO separation and administrator positions are also stable agency principles with problems. Although in theory, the CEO could withdraw from the decision-making regarding administration pay and execution assessment, practically speaking this is problematic because the seat has a crucial role in guiding the board and constantly collaborates with board members to determine the plan and other board of directors’ guidelines (Cristofaro, Bao, Chiu, Hernández-Lara, & Perez-Calero, 2023 ). Xanthopoulou, Kalantonis, Arsenos, and Kallandranis ( 2023 ) investigated that fraud was increasingly common in businesses with the CEO as Chairman is one example of the detrimental effects of the CEO-chairman dual role. As a result, a CEO duality is projected to decrease the IPO performance. From theoretical and literature background, we came up with the following hypothesis, H4 There is a negative effect of CEO Duality on IPO Performance. Political instability in any country has had a significant impact on the country's economy, as evidenced by changes in the MSCI index value (Doong & Doan, 2022 ). Similarly, political instability led to uncertainty, lack of investment, and a decrease in economic growth (Farooq, Gillani, Subhani, & Shafiq, 2023 ). Political instability can take many forms, including coups, civil war, and protests (Krcmaric & Escribà-Folch, 2023 ). Such situations may erode public trust in the government, potentially resulting in reduced investments and slower economic growth (Edokat, Ngongang, & Zeh, 2023 ). However, an investor may be hesitant to invest in a country with political instability. According to Burnać, Visković, and Nikolić ( 2023 ) the capacity for growth is largely influenced by how stable its political system has been over time (regardless of whether it is democratic or not), which has to do with how prone it is to military coups or significant changes in governmental structures. Political instability diminishes the motivation to build up physical capital (Henri Aurélien, Bruno Emmanuel, Hervé William, & Thierry, 2023). According to past studies, political instability has a large negative impact on investment, which is consistent with this point of view (Guirguis, Koimisis, & Camara). In addition to impeding investment decisions, political instability and turbulence slow down national growth rates and economic development overall (Asongu & Odhiambo, 2023 ; Guirguis et al.). Political instability is likely to restrict policymakers' time horizons, resulting in subpar short-term macroeconomic policies, (Dagher & Hasanov, 2023 ). According to Mehmood, Mohd-Rashid, and Ahmad ( 2020 ), political instability in the economy leads to a decrease in the return, especially in Pakistan where large political instability has been observed in previous decades. Meluzin, Balcerzak, Pietrzak, Zinecker, and Doubravsky ( 2018 ) also investigated that the performance of the firms is affected by some macroeconomic factors including political instability and government policies, also concluded that the country controls this weakness then they can promote their business, especially the IPO organization, and also conclude that the political instability leads to the strikes, close of the business activities. Wang and Wu ( 2020 ) also concluded that politics has direct conditions on the growth of the business. In the similar way it may affect the IPO performance. Mehmood, Mohd-Rashid, Che-Yahya, and Ong ( 2021 ) also investigated that there are a large number of factors that affect IPO performance including inflation, interest rates, fiscal policy, government policy, environmental factors and the political condition within the country. According to Gounopoulos, Loukopoulos, Loukopoulos, and Wood ( 2022 ) that the performance can be affected by the country political instability and also the corporate politics within the employees, shareholders and the stakeholders, and therefore these factor will create the negative impact on the IPO performance of the organizations. Moreover, Pakistan has had a long history of political instability since independence (Siyal, 2021 ). Moreover, in recent years, the Pakistan economy has been facing various political instabilities which have impacted its stability, security, and development (Rauf, Abbas, Rafiq, Shakir, & Abid, 2022 ). According to Imran, Murtiza, and Akbar ( 2023 ), economic disturbances stem from a variety of factors including political disputes, ethnic tensions, and security challenges, and also decrease the currency value due to political instability. As a result, political stability is projected to increases the IPO performance, whereas the political instability is projected to decrease in IPO performance and vice versa. On the ground of the previous literature, we developed the following hypothesis. H5 There is a significant positive impact on political stability and IPO performance. Furthermore, after the theoretical and empirical literature review in the context of the different economies and cultures, this study seeks to fill the two important literature gaps about corporate governance and IPO performance, Political instability and IPO performance in emerging economies that point was pointed out by Mehmood, Mohd-Rashid, Ahmad, and Tajuddin ( 2023 ), respectively. To fill this gap, we employed a variety of techniques and methods to add our contribution to the body of literature in the context of a merging economy like Pakistan. Similarly, previous studies use the only measure of the IPO performance such as the IPO first-day return, but our study filled this gap by including different measures such as average week return and average 30 days return as the measure of the IPO performance as the Robust analysis. Moreover, this study contains the empirical data gap, previous studies use data that does not contain any change in the corporate governance mechanism, but our study contains twofold change in the corporate governance of Pakistan. Finally, our study contains the conceptual gap related to the political instability impact on the IPO performance because political stability is the major concern in maintaining the volatility of the markets especially in emerging economies (Karmaker, Al Aziz, Palit, & Bari, 2023). Moreover, Pakistan has an increasing trend of political instability due to frequent changes in the government setup starting from last two decades. After the theoretical and empirical literature critical review on the relationship between the criteria and explanatory variable, we developed the conceptual framework for our study in Fig. 1. Figure 1: conceptual framework 3 Research Design 3.1 Data and sample selection In this study, we focused on the Pakistani capital market's most recent IPOs, which require increasing amounts of real data to produce a reliable outcome to assess the current status of IPO success and to look into the relationship of the board characteristics and political instability with IPO performance in Pakistan. From the emerging economies, Pakistan is selected on the grounds of being the most volatile economy due to the code of the corporate governance mechanism weakness and also due to the political unrest within the economy over the last decade. For analysis, historical data from all IPOs launched in Pakistan over the last fifteen years (2008–2022) was gathered. There are three reasons behind the selection of these data periods. First, it is due to the change of the code of the corporate governance mechanism in Pakistan in 2011, and second changes in corporate governance were done in February 2017. Second, in these periods (2008–2022) there was much attention given by the security commission of Pakistan (SECP) for promoting the firms to initial public offering to build the business activities in promoting their economic condition by attracting foreign direct investment and also with the aim of overcome the current account losses of the balance of payments. The third reason for the period selection is the rapid change in the Pakistan political situation because this period covers the four times changes in the political government in Pakistan and also covered the large number of political strikes in that selected period by the political parties that led to political instability within Pakistan. Moreover, board characteristics such as board size, board independence, CEO duality and gender diversity is selected from the corporate governance practices because during the IPO valuation the decision-making process is very essential for attaining the expected return and also necessary for accurate price adjustment at first time. According to Bonardo, Paleari, and Vismara ( 2011 ) that the decision making and planning is necessary for the IPO valuation because the board chooses a price strategy for the IPO shares. This includes selecting the first offering price and the quantity of shares to be offered. Pricing too high may dissuade investors, while pricing too low may result in money being lost. Therefore, the first-time price adjustment may attract investors and other stakeholders. Data was collected from the Annual reports of the selected firms. The primary sources of data for this study were the Annual reports of each IPO company, the prospectus of the firms, and the annual and quarterly reports provided by the organizations. From 2008 to 2022, there was a total of 56 firms listed in the Pakistan stock exchange as IPOs. From this listed IPO there are only 49 firms that have participated in trading due to the sale of shares through underwriters and 7 firms’ data is not available. Therefore, based on the trade flow of the new IPOs, we selected 49 IPO firms as a sample. 3.2 Independent variable measurement The board size is the total number of the board of directors in the board compositions of the organizations including all types of directors in the board (Abdullah, Ismail, & Jamaluddin, 2008 ). Board independence means the total non-executive directors in the board compositions (Abdullah et al., 2008 ) and (Afify, 2009 ). Board independence also includes the external directors that are not the shareholders of the organizations and they hired for the development of the organizations. Gender diversity means the women participate in the board composition either executive or non-executive directorship. In this study, we measured the women directors in the board composition as measured by Afify ( 2009 ). CEO duality means if the CEO has a double role as the CEO of the organization and the chairman of the board then CEO duality exists in that organization. In the selected organizations if CEO duality is present then we represent by dummy variable 1 and if not then denoted by 0. Political instability means political unrest within the country and it is measured through the world governance indicators of the political stability score as used in this proxy (Alhassan, Li, Reddy, & Duppati, 2021 ). The political stability is measured by the WGI indicator, and it ranges from 2.5 to -2.5. The positive indicators show political stability and the negative show the political instability within the country. +2.5 value indicates higher political stability and − 2.50 indicates higher political instability within the economy. The measurement of an independent variable is illustrated in table 1. Table 1: Measurement of independent variables Variable Name Sign Measurement Reference Board size BSIZ Total number of board of directors (Abdullah et al., 2008 ) Board independence BIND Non-executive directors in board composition (Abdullah et al., 2008 ) and (Afify, 2009 ) Women Director NWD Total no. of women on Board (Afify, 2009 ) CEO Duality CEO is measured by a dummy variable 1 if CEO-Chairman roles combined; 0 if separated (Gill & Mathur, 2011 ), (Afify, 2009 ) Political Stability index PS Measured by WGI indicator of political stability within the country. It ranges from 2.5 to -2.5. The positive indicators show political stability and the negative show the political instability within the country. +2.5 value indicates the higher political stability and − 2.50 indicates the higher political instability within the economy. (Alhassan et al., 2021 ) Source: Authors' computations 3.3 Dependent variable Measurement. Our main focus is IPO performance, which is determined by the first-day return (IPOR) as measured by Abbas, Ahmad-Zaluki, and Mehmood (2023 & Accounting, 2023 & Accounting, 2023); Kao, Wu, and Yang (2009) and earning per share of the first year as measured by Kao et al. (2009); Scholte Lubberink (2023). The initial public offering return of the first day is the difference between the closing and opening price of the stock prices. The measurement of the dependent variable is given in Table 2. Table 2: Measurement of dependent variables Variable name sign Measurement Reference IPO return IPO return first day (Abbas et al., 2023) Earnings per share Earnings per share (Kao et al., 2009) Source: Authors computations 3.4 Control variable measurement. In this study, we used the two control variables including firm size and the age of the organizations. In this research we used firm size is measured through the log of total assets of the organizations (Fujianti & Satria, 2020), the size of the firm depends upon the assets of their portfolios. The firm age is the number of years from the incorporation of the organization (Fujianti & Satria, 2020). The measurement of the control variable is also illustrated in Table 3. Table 3: Measurement of control variables Variable Name Sign Measurement Reference Firms Size LSIZE Measured By Total Assets and log transformation is used to compare its value (Fujianti & Satria, 2020) Firms Age AGE Number of years from the incorporation to the IPO (Fujianti & Satria, 2020) Source: Authors computations 3.5 Empirical estimations Model 1. IPO return of the first day. $$\:{IPOR}_{it}={\alpha\:}_{0}+{\beta\:}_{1}{BIND}_{it}+{\beta\:}_{2}{BSIZ}_{it}+{\beta\:}_{3}{CEO}_{it}+{\beta\:}_{4}{NWM}_{it}+{\beta\:}_{5}{LSIZE}_{it}+{\beta\:}_{6}{PROFIT}_{it}+{\beta\:}_{7}{AGE}_{it}+{\beta\:}_{8}\text{P}\text{S}it+{\text{ἑ}}_{it}$$ Model 2. Post IPO performance analysis: EPS as the IPO performance measure. $$\:\underset{t1}{{EPS}}.={\alpha\:}_{0}+{\beta\:}_{1}{BIND}_{it}+{\beta\:}_{2}{BSIZ}_{it}+{\beta\:}_{3}{CEO}_{it}+{\beta\:}_{4}{NWM}_{it}+{\beta\:}_{5}{LSIZE}_{it}+{\beta\:}_{6}{PROFIT}_{it}+{\beta\:}_{7}{AGE}_{it}+{\beta\:}_{8}\text{P}\text{S}it+{\text{ἑ}}_{it}$$ In this study, we used two statistical analysis methods, regression analysis and its robustness through random/fixed effect model, and generalized methods of movement (GMM). Regression analysis is a sophisticated statistical method used to analyze the relationship between two or more variables. To illustrate the use of regression analysis in this context, we have framed the comparison. The final phase of this examination makes use of measurable analysis to identify the relationship between board features, Political instability and IPO performance. We frequently performed regression analyses as part of our research. We compare the findings of our regression analysis to previous academic findings on the connection between board performance and business performance. For the robustness analysis, we used the random/fixed effect model, and generalized method of movement (GMM). The GMM method is very effective for simultaneous or structural effects. We used the GMM methods as the robustness analysis because there is a weakness of the regression methods in that it does not cover the simultaneous effect especially it failed on the structural equations. In our variables, it is doubtful that the endogenous variable IPO performance may affect the board characteristics and political instability, and at the same time board characteristics and political instability may affect IPO return also, so to investigate the real impact of the exogenous variables (board characteristics and political instability) on the endogenous variable (IPO performance) we used the GMM methods. Another reason, we used GMM methods for checking the accuracy of the results with more effectiveness through removing the autocorrelation problem between the variables. 4 Empirical Results Table 4 Descriptive Statistics Mean Max. Min. Std. Dev. BIND 2.000000 3.000000 0.000000 2.188988 BSIZ 7.224490 11.00000 0.000000 1.674133 CEO 0.163265 1.000000 0.000000 0.373438 AGE 19.59184 76.00000 0.000000 19.59264 LSIZE 2.007631 3.006542 0.000000 1.700762 GDIV 0.428571 3.000000 0.000000 0.763763 PS -0.00561 0.030500 -0.98129 0.986328 IPOR 0.260223 10.52963 -0.09836 1.517746 EPS 3.394061 19.14000 -4.43 4.746501 Source: Authors' computations In Table 4 , the descriptive statistics are shown, The Board Independence value of the mean is 2 according to the Code of Corporate Governance 2012 there must be at least one independent director, and in the Code of Corporate Governance 2017 the amendment was made that, there should be minimum 2 independence director or there is 1/3 portion is compulsory for independent directors in the board, the role of independence director is very important in any board as any decision is taken by the board due to the independence director the decision is not one-sided or for not for the beneficial edge for some specific members due to the presence of independent directors the decision is beneficial equally for all the shareholders. So, the presence of independent directors is encouraged for the performance of IPOs. The size of a company's board of directors is a crucial aspect of its corporate governance structure. According to the Corporate Governance Act of 2011, the minimum number of directors on a board should be seven. When a board is a smaller size, it may lead to better performance for the company at any stage. On the other hand, larger boards may negatively impact a firm's performance. When the board is too large, decision-making can become more challenging due to conflicting perceptions among directors. The board may struggle to reach a final decision, resulting in inefficiencies. Additionally, larger boards typically require higher remuneration, which increases expenses for the company. Therefore, companies with larger boards may not perform as well as those with smaller, more streamlined boards. In our descriptive, political stability has the means value of -0.0056 indicating the political unrest in Pakistan in the selected period. In Table 5 , We checked the correlation of all the variables and found all the correlation value is less than 0.80. So, we can say that there is a weak correlation between the variables. Table 5 Correlation Matrix of Variables Source: Authors' computations IPOR AGE BIND BSIZ CEO FSIZE GDIV EPS IPOR 1 AGE 0.388 1 BIND -0.006 0.101 1 BSIZ -0.014 0.024 0.318 1 CEO -0.063 -0.125 0.076 0.040 1 LSIZE -0.023 -0.541 -0.012 -0.075 0.170 1 GDIV -0.085 -0.091 -0.312 0.005 0.261 0.283 1 EPS 0.302 0.339 0.396 0.051 0.142 -0.160 -0.147 1 Table 6 ADF test for data stationarity Variables ADF test t-statistics Prob IPOR -24.560 0.000*** AGE 0.141 0.000*** BIND -0.981 0.000*** BSIZ 16.981 0.001*** CEO -0.173 0.009*** LSIZE 0.763 0.000*** GDIV -0.125 0.000*** PS 0.191 0.000*** EPS 78.198 0.000*** Note: Results are significant at 1%, 5%, and 10% levels of significance To check the data stationarity, we used the Augmented Dickey-Fuller test given in Table 6 . The ADF test values are significant at a level of the data indicating that the data is stationary at its level, and we do not need to take the differences. Table 7 Regression Analysis. Variables Model 1 Model 2 Coefficient Prob. Coefficient Prob. BIND 0.110 0.056* 0.112 0.030** BSIZ -0.005 0.069* 0.001 0.993 AGE 0.026 0.038** 0.066 0.920 CEO -0.049 0.939 0.000 0.935 LSIZE 0.001 0.876 -1.987 0.875 GDIV -0.191 0.559 0.087 0.100* PS 0.006 0.097* 0.025 0.051** R-squared 0.6091 0.3421 Adjusted R-squared 0.4754 0.3218 Prob(F-statistic) 0.0093*** 0.0000*** Durbin-Watson stat 1.9952 2.0182 Note: Results are significant at 1%, 5%, and 10% levels of significance In our results Table 7 , the R-squared and the adjusted R-squared for model 1 are 0.609 and 0.4754, respectively indicating the overall 63% changes in the IPO return is represented by the corporate governance and its control variables. The remaining effects variables are not taken in the regression which may be the limitations and future research suggestions. Similarly, the p-value of the model is significant, indicating the model fitness of the regression. Moreover, the R-squared and the adjusted R-squared for model 2 are 0.342 and 0.321, respectively, indicating the 34% change in the IPO performance is represented by the corporate governance and included control variables, and also p-value falls under significant regions indicating the model fitness. Our findings of model 1 in Table 7 , show that the board independence has a significant 10% level of significance and positive impact on the IPO return (IPOR) indicating that increase in the board independence leads to a rise in 0.110 in the IPOR of the initial public offering. Similarly, the board size has a significant and negative impact on the IPOR indicating that the increase in the board members leads to a decrease in the IPOR by 0.005. Firm age has a significant positive impact on the IPOR indicating that the higher experienced firm leads to a rise in the IPOR by 0.026. Moreover, CEO duality, firm size, and gender diversity have no significant findings that show there is the existence of an impact between them due to the cultural changes. However, Political stability has a positive impact on the IPOR due to a significant positive impact on the IPOR indicating that the improvement in political stability leads to a rise in the 0.006 in IPOR, while political instability leads to a decrease in the IPOR and vice versa. Our findings in Model 2 Table 7 , show that board independence has a positive and significant impact indicating the increase in the independent directors leads to a rise of 0.112 in the earning per share (EPS) of the first year. Similarly, gender diversity has a significant positive impact on the EPS, it means that number of the women in the board composition leads to a rise in the 0.087 in EPS of the first-year post-IPOs. Whereas political stability has a positive impact on the EPS, indicating the increase in the political stability leads to a 0.025 increase in EPS. However, the political instability will have a negative relationship with EPS. Robustness analysis: Random effect, Fixed effect and GMM method Any empirical study, including regression analysis, must include robustness tests. Researchers frequently utilize random effects (RE) and fixed effects (FE) models when performing regression analysis using panel data to address potential concerns such as unobserved heterogeneity or omitted variable bias. These strategies can be used to test the robustness of the initial regression analysis results. It is critical to select the correct model depending on the underlying assumptions of your data and research issue. When dealing with time-invariant unobserved heterogeneity, fixed effects are normally chosen, while random effects may be more appropriate if the assumptions of random unobserved heterogeneity hold. Therefore, we run the Housman Specification test for accuracy and selected from the random and fixed effect model. First, we estimate the random effect model then we checked it through Housman specification test (as shown in Table 9 ) that the random is effective because probability value is not significant indicating that the random effect is sufficient for the measuring intercept variation in the analysis. Moreover, when random hypothesis is accepted then we are not going forward to the fixed effect, it shows that the random sufficient and we rely on random effect results. The random effect model results are shown in Table 8 . Table 8 Random Effect Method of Estimation Variables Model 1 Model 2 Coefficient Prob. Coefficient Prob. BIND 0.220 0.000*** 0.112 0.000*** BSIZ -0.046 0.000*** 0.011 0.000*** AGE 0.019 0.000*** 0.054 0.000*** CEO -0.075 0.000*** -0.034 0.000*** LSIZE 0.001 0.004*** 3.875 0.005*** GDIV 0.009 0.000*** 0.098 0.000*** PS 0.098 0.000*** 0.075 0.001*** R-squared 0.5912 0.4312 Adjusted R-squared 0.5401 0.3913 Prob(F-statistic) 0.000*** 0.0000*** Durbin-Watson stat 2.0121 2.1001 Note: Results are significant at 1%, 5%, and 10% levels of significance Table 9 Housman Specification Test for Random Effect Null Hypothesis: Test cross-section random effects: Random is effective Test Summary Chi-Sq. Statistic Chi-Sq. d.f. Prob. Cross-section random 12.761 6 0.2571 Our random effect model findings shows that the board independence has significant positive relationship with the IPO performance during and post IPO indicating that the rise in the board independence leads to rise in the IPO performance by 0.220 and 0.112, respectively at both time domain. Moreover, board size has a significant negative relationship with first day return but provides significant positive relationship with performance of IPO in long run due to affect the EPS of the first year of the organizations positively. The firm age has a significant positive relationship with the IPO performance. The CEO duality has negative relationship with IPO performance during and post IPO. The firm size has also positive relationship with IPO performance. Moreover, gender diversity and political stability has a positive link with IPO performance. However, the random effect results are more validated as compared with the regression findings due to capture the random effect is found in the selected firms in the industry. The lag effect of the dependent variable is not capture by the regression, and the random effect model, therefore there is need to the method of estimation that should be very useful for capturing the lag effect of the dependent variable that should provide more accurate and reliable findings. However, Generalized methods of movement (GMM) are useful for the more robustness findings of the existing models for making results more reliable for the investigations. For the robustness analysis, by employing the difference GMM method in Table 10 , the J-statistics value is less than 0.500 and its probability is falling under accepted criteria of the significance indicating the GMM method suitability in this study. Our GMM findings improve the findings of the random effect model by improving their coefficient and also improving the level of significance in some relationship. Therefore, the directions of the relationship are not changes that show the same direction as compared with the random effect model, but their strength of relationship enhance due to new method of estimation. The improvement in strength may be due to the disparities between the expected and observed moments are suitably minimal. Moreover, the previous value of the dependent variable IPOR is useful for predicting 0.001 to the current value of IPOR. Moreover, there previous value of the EPS is also significant but its effect on current is minimum. Table 10 Results of the GMM methods through different GMM Variables Model 1 Model 2 Coefficient Prob. Coefficient Prob. IPOR (-1) 0.001 0.009*** - - EPS (-1) - - 0.000 0.000*** BIND 0.227 0.000*** 0.231 0.000*** BSIZ -0.067 0.000*** 0.071 0.000*** AGE 0.029 0.000*** 0.098 0.000*** CEO -0.098 0.000*** -0.081 0.000*** LSIZE 0.007 0.000*** 5.981 0.000*** GDIV 0.018 0.000*** 0.099 0.000*** PS 0.132 0.000*** 0.079 0.000*** J-Statistics 0.078 0.061 Prob(J-statistics) 0.000*** 0.000*** Note: Results are significant at 1%, 5%, and 10% levels of significance 5 Discussions on Findings Our results showed that when we used First Day Return as a performance metric, it suggested the presence of independent directors has improved the performance of IPOs by consulting on the issue using appropriate valuation methodologies and tools. In that context, our results are consistent with the previous findings of (Ming & Hock Eam, 2016 ). Therefore, the interests of managers and shareholders may not always be aligned, and managers may prioritize their interests over those of shareholders and in this way consistent with the agency theory principles. Independent directors, who are not affiliated with management and have no financial or personal interests in the company, can act as a check on the power of managers and protect the interests of shareholders. This can improve the transparency and accountability of the company, which can in turn enhance the performance of the IPO. In line with our results, the stewardship theory also supports the idea that independent directors can improve the performance of IPOs (Tricker, 2015 ). There is a strong negative relationship between board size and IPO performance during the initial stage of IPO taken first day return and, in this way, if the board is wide, the performance may suffer since there will be a lot of systematic thinking and opposing viewpoints in any activity, which could deter people from making sensible judgments, which are essential for the success of the company. In this way, our findings are similar to the previous findings of Githaiga et al. ( 2022 ). Moreover, consistent with the agency theory that larger boards may lead to a diffusion of responsibility and accountability, making it more difficult for directors to monitor and control management. Another theory that supports the negative relationship between board size and IPO performance is the resource dependence theory. This theory suggests that larger boards may result in more demands on company resources, such as time and money, which negatively impact the company's performance. Larger boards may also lead to more diverse opinions and interests, which can make it more difficult to align the interests of board members with those of the company. In addition, the presence of a large board may lead to a lack of communication and coordination among directors, which negatively affects the company's decision-making process and performance. The fact that there are so many directors on the board is also made known, and it is possible that having so many directors will have an impact on the company financially. Given the foregoing opinions, the performance of the IPO is therefore affected by the enormous size of the board. Inconsistent with the previous literature, our findings are opposite to Moses, Che-Ahmad, and Abdulmalik ( 2020 ). Moreover, from our findings, we can see that the board size has a positive relationship with EPS that shows the larger board size has the beneficial for long term efficiency of the firms due to timely decisions with large number of the brainstorming. CEO duality, where the CEO also serves as the chairperson of the board of directors, often has a negative relationship with the performance of an Initial Public Offering (IPO) due to the potential for conflicts of interest and reduced accountability. In such situations, the same individual holds the highest executive and leadership positions, which can hinder independent oversight and governance. This lack of checks and balances may lead to decisions that prioritize the CEO's interests over those of shareholders, eroding investor confidence and negatively impacting the IPO's performance. Strong corporate governance, often associated with separate CEO and board chair roles, is a critical factor in achieving a successful IPO. In this way, our findings are similar with the findings of Boyd ( 1995 ) that show the negative relationship between CEO duality and the firm performance both short and long term. In our findings, gender diversity improves IPO performance. Gender diversity, where a diverse set of perspectives, experiences, and skills are represented at the leadership and board level, can have a positive relationship with the performance of an Initial Public Offering (IPO). Gender diversity brings a wider range of insights and decision-making approaches, potentially leading to more effective problem-solving, innovation, and risk management. Companies with diverse leadership teams are better equipped to address evolving market dynamics and consumer preferences, enhancing their adaptability and competitive advantage. Moreover, gender diversity can attract a broader investor base, improve reputation, and foster better employee engagement and talent retention, all of which contribute to the overall success of an IPO. Therefore, our findings are similar with Alodat, Salleh, Nobanee, and Hashim ( 2023 ) that shows gender diversity increases performance. Political stability has a significant positive impact on IPO performance that indicates political stability leads to a rise in the IPOR and also useful for the long-term sustainability represented by the findings of the post IPO findings through EPS. Political instability indicates that when political unrest within the economy decreases the trading volume of the organization it leads to a decrease the performance. In this way, our results are similar to previous findings of Mehmood et al. ( 2021 ) which also showed a similar effect of political instability on the economy and it has the same relationship with respect to other environments as suggested by different theories and concepts. Similarly, according to institutional theory, political instability can lead to a breakdown of the institutions that support the functioning of the economy. This can include a weakening of property rights, increased corruption, and decreased investor confidence. In an uncertain political climate, companies may encounter greater challenges in securing capital via an IPO, as investors could be less inclined to invest due to heightened risk perceptions. Another theory that explains the relationship between political instability and IPO performance is the signaling theory. According to this theory, an IPO is seen as a signal of the company's quality and potential for growth. Political instability can send a negative signal to investors, as it suggests that the business environment may be unpredictable and risky. This can lead to a decrease in investor demand for the IPO, which can in turn lower the price of the IPO and harm the performance of the company. The agency theory also supports the idea that political instability can harm the performance of an IPO. According to this theory, managers may prioritize their interests over those of shareholders. In a politically unstable environment, managers may be more likely to engage in opportunistic behavior or take actions that benefit themselves rather than the company. This can harm the performance of the IPO and ultimately harm the long-term interests of the company. 6 Summary and Conclusion In conclusion, board characteristics such as board independence and board gender diversity increase the performance of IPO at initial as well as post IPO. Moreover, the board size decreases the performance initially but improves the performance for a long time. CEO duality decreases the performance of IPO. Political stability improves the performance, while political unrest decreases the performance of IPO. Moreover, Table 11 shows the summary of the hypothesis decisions. Our study has made a great contribution to the previous theory and literature in the following ways. First, this study provides empirical evidence on the relationship between board characteristics & political stability and IPO performance in emerging economies, especially Pakistan. Second, it contributed to the existing theory and literature related to the board size having both negative and positive relationship with IPO performance and it is depending on time domain. Third, board independence is necessary for the performance of IPO both short- and long-term sustainability of the organization to attract different investors, stakeholders across the globe. Fourth, gender diversity in the board composition make more rigor decisions that improve the overall performance of the organizations. Table 11: Decision on Hypothesis No. Alternative Hypothesis Statement Expected Directions Decision for Null Actual Directions H1 There is a positive effect of board independence on IPO Performance + Completely Reject + H2 There is a Positive effect of gender diversity on IPO performance + Completely Reject + H3 There is a positive effect of the board size on IPO Performance. + Completely Reject +/- H4 There is a negative effect of CEO Duality on IPO Performance. Completely Reject H5 There is a significant negative impact of political instability and IPO performance. Completely Reject Source: Author Computation The study has several implications for companies considering an IPO and policymakers involved in promoting economic growth. The companies considering an IPO should carefully consider their board structure and ensure that it is optimized for success. This may involve appointing independent directors, improving board diversity, and ensuring that the board is effective in overseeing the company's operations and strategy. Companies should also consider the potential impact of political instability on their IPO performance and take steps to mitigate these risks. The policymakers should focus on promoting political stability and strengthening institutions that support economic growth. This may involve improving the rule of law, reducing corruption, and providing a stable business environment that encourages investment and entrepreneurship. Policymakers should also consider the potential impact of political instability on IPO performance and take steps to mitigate these risks, such as providing incentives for companies to list during stable periods. This study provided the guidelines to government for implementation of proper code of corporate governance in term of board selection mechanism that is necessary for the improvement of the IPO performance in different environment such as war, crisis and political instability. Investors should carefully consider the board characteristics and political environment of companies considering an IPO before making investment decisions. This may involve conducting due diligence on the board structure and examining the political environment in which the company operates. Investors should also consider the potential impact of political instability on the performance of the IPO and the company's long-term prospects. Moreover, the study also advocated the important implications for companies, policymakers, and investors. By carefully considering these factors, companies can improve their chances of success in the IPO market, policymakers can promote economic growth, and investors can make informed investment decisions. There are several limitations to the study of board characteristics and political instability on IPO performance that should be acknowledged. This study may suffer from selection bias since it only examines a specific sample of IPOs. The findings may not be generalizable to other types of IPOs or IPOs in different markets and hence, on different markets, this one be the future topic. Some unavailability of data about board characteristics such as qualification of the board’s members, skills, and experience is the limitation of this study and future research should be conducted on these factors based on the availability of the data. This study has taken some factors and missing the other factors that affect the IPO performance due to limitations. Other factors, such as market conditions and industry trends, may also influence IPO performance and may be a future research topic. Finally, the study does not consider the potential impact of other factors, such as the quality of management or the company's financial performance, on IPO performance. These factors may also be important determinants of IPO performance and should be considered in future research. Declarations Author Contribution Muhammad Waris contributed to methodology, concept and analysis. He is the sole author and contributed to the whole paper. Data Availability The datasets generated during the current study are available from the c orresponding author on reasonable request References Abbas YA, Ahmad-Zaluki NA, Mehmood W. (2023). Community and environment disclosures and IPO long-run share price performance. J Financial Report Acc. Abdullah WZW, Ismail S, Jamaluddin N. 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The impact of chinese big tech on the traditional financial market: evidence from Ant Group. Electron Commer Res, 1–27. Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-5302454","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":378285981,"identity":"5af7cc1f-df98-4b10-a8a4-7fbeea10ac0c","order_by":0,"name":"Muhammad Waris","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA6UlEQVRIiWNgGAWjYJCCA3DWByBmYydFC+MMkBZmUqxj5gGTBFQZHD/78ODPPXZy/DOyEz/b/Nomz8fMwPjhYw4eLWfSDQ7zPEs2lriRu1k6t++2YRszA7PkzG24tZgdSGM4zHCAObHhRu425tye24xALWzMvPi0nH/GcPDHgfrE+SAtlj237QlruZHGcIDnwOHEDSAtDD9uJxLUYn/jGcNhngPHjQ3PvN0s2dtwO7mNmbEZr18k+9OYP/44UC0ndzx344cff27bzm9vPvjhIx4tqICxDUw2EKseBP6QongUjIJRMApGCgAAglZVKzTulboAAAAASUVORK5CYII=","orcid":"","institution":"University of Education","correspondingAuthor":true,"prefix":"","firstName":"Muhammad","middleName":"","lastName":"Waris","suffix":""}],"badges":[],"createdAt":"2024-10-21 08:23:38","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-5302454/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-5302454/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":69099124,"identity":"583a4dd8-63be-45ee-be15-990a3e729832","added_by":"auto","created_at":"2024-11-15 15:24:00","extension":"png","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":30936,"visible":true,"origin":"","legend":"\u003cp\u003e\u003cem\u003econceptual framework\u003c/em\u003e\u003c/p\u003e","description":"","filename":"1.png","url":"https://assets-eu.researchsquare.com/files/rs-5302454/v1/dcb57e2389bafd8cb2307dfc.png"},{"id":77042493,"identity":"148ed15c-1330-4314-a7bf-944c3af78f60","added_by":"auto","created_at":"2025-02-24 14:17:15","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1112796,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-5302454/v1/77b33a10-3f8e-46b4-bbae-025cad7d9d32.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Nexus of corporate governance, political stability and Performance: Evidence from IPOs of an emerging economy","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eThe performance of initial public offerings (IPOs) is a topic of great interest and scrutiny in the financial and investment world. This interest derives from the exciting challenge offered by the diversity of IPO rules and regulations across markets and jurisdictions. Each market may have its own set of rules and procedures in terms of disclosure requirements, investor protection, and corporate governance norms, resulting in a complicated and varied landscape for companies looking to go public. Understanding the impact of these different norms on IPO performance is important because it affects not just investment decisions but also market efficiency, cross-border capital flows, and the global economy. As a result, analyzing norm deviations and their implications for IPOs can give significant information for investors, legislators, and others.\u003c/p\u003e \u003cp\u003eCorporate governance practices in emerging economies have a substantial impact on the performance of IPOs (Watanabel, Yamauchi, \u0026amp; Sakawa, \u003cspan citationid=\"CR83\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Weak corporate governance raise worries about transparency, accountability, and shareholder rights protection, potentially discouraging investors from engaging in IPOs (Wynant, Manigart, \u0026amp; Collewaert, \u003cspan citationid=\"CR85\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Recent research, such as Hsu and Liao (\u003cspan citationid=\"CR41\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) and Tapa and Mazlan (\u003cspan citationid=\"CR79\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), has emphasized the negative impact of poor corporate governance on IPO performance in emerging countries, where regulatory frameworks and enforcement may be weaker than in developed economies. According to Al-Masawa, Mohd-Rashid, Al-Jaifi, and Al-Duais (\u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), strengthening corporate governance rules and practices in these regions is critical for encouraging investor confidence, facilitating capital flows, and assuring the long-term success of IPOs.\u003c/p\u003e \u003cp\u003eThe performance of IPOs in emerging countries is definitely vulnerable to the effects of political insecurity, which is a widespread issue in many regions. Political unrest lead to increased regulatory ambiguity, a loss of investor confidence, and potential commercial interruptions (Mejia \u0026amp; Aronstein, \u003cspan citationid=\"CR61\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Several researchers such as Sukaesih Kurniati and Suryanto (\u003cspan citationid=\"CR77\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) and G\u0026oacute;mez-Mej\u0026iacute;a et al. (\u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e2023\u003c/span\u003e), have found a link between political insecurity and poor IPO success in emerging nations. Understanding and resolving these political stability concerns is crucial for both investors and businesses when evaluating the risks and potential associated with IPOs in these locations, making it a significant concern in the context of emerging market investments.\u003c/p\u003e \u003cp\u003eHowever, the study of the influence of corporate governance and political instability on IPO performance in Pakistan differs from that of other emerging nations due to the unique combination of factors at play in the country. Pakistan faces specific challenges and opportunities that set it apart from its peers, making it imperative to conduct a separate examination. Pakistan has experienced a distinct pattern of political instability, with frequent changes in government and fluctuating political environments. Zeeshan, Rehman, Ullah, Hussain, and Afridi (\u003cspan citationid=\"CR87\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) highlight the country's volatile political landscape. The effects of this instability on corporate governance and IPO performance may differ from other emerging economies, necessitating a specific study. Pakistan's geopolitical location and relationships with neighboring countries such as India and Afghanistan present distinct economic and political challenges. The importance of understanding the impact of regional geopolitics on Pakistan's economic stability is highlighted by Ismail and Husnain (\u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Pakistan's stock market and regulatory framework have their unique quirks. Jamaani, Alidarous, and Alharasis (\u003cspan citationid=\"CR46\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) highlighted market-specific developments, such as legislative changes and IPO activity, that necessitate more examination to understand their impact on IPO performance. Pakistan is confronted with various economic issues, such as inflation and fiscal deficits, which can interact with corporate governance and political instability. Mehmood, Alsmady, Amin, Mohd-Rashid, and Aman-Ullah (\u003cspan citationid=\"CR57\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) thrown light on these problems and their implications for IPO performance.\u003c/p\u003e \u003cp\u003eHowever, examining corporate governance standards in the context of political instability is a top priority in emerging economies for several compelling reasons. Political insecurity in these places, which is frequently characterized by frequent changes in leadership, shifting policy directions, and regulatory uncertainty, can have a significant impact on the economic environment. According to Salehi, Ammar Ajel, and Zimon (2022), this insecurity lead to governance issues, limiting transparency and accountability. Furthermore, in such circumstances, corporations may face temptations to engage in rent-seeking conduct or traverse a complex web of political ties, which can erode the norms of good governance. Understanding the delicate connection between corporate governance and political instability is critical for investors and corporations, as well as policymakers aiming to promote economic stability and encourage investment in these rising economies. Hence, with the motivations of some influencing factors of the initial public offering, we looked forward to this research issue in our study.\u003c/p\u003e \u003cp\u003eThere is a considerable research gap in the complete assessment of how various board characteristics and political instability affect the performance of IPOs listed on the Pakistan Stock Exchange. While previous research has looked at the impact of corporate governance and political stability on IPO performance in developed economies, there is no research that looks at the complex interaction of these two elements in the context of Pakistan, where economy faced different aspect of troubles with their financial indicators. The investigation of the political instability in term of emerging economy motivates the researchers for evaluation the relationship and consequences of political instability on IPO performance that create another research gap for investigation of Pakistan stock market listed firms. Investigating this relationship could provide useful insights into the unique challenges and opportunities that IPOs face in a politically volatile emerging economy. Such research will help to develop more effective corporate governance frameworks tailored to the needs of companies operating in regions with similar challenges by identifying how board characteristics influence firms' ability to navigate political instability and maintain good governance. Moreover, previous studies use only the regression analysis and cointegration methods but does not provide accurate methodology to justify their result robustness that create another interesting research gap for investigation, but this study use Generalized method of movement (GMM) for robustness of the findings.\u003c/p\u003e \u003cp\u003eThis research aims to elaborate dynamics between board characteristics of corporate governance practices, the continually sprouting landscape of political instability, and IPO performance in Pakistan. However, our objectives are to investigate the effect of the board characteristics such as board size, board independence, CEO duality and gender diversity on the IPO performance that listed in Pakistan Stock exchange. Another objective includes is to investigate the impact of the political instability on the IPO performance in emerging economy especially in Pakistan. Moreover, by examining these elements, we want to gain a better understanding of how they affect the performance of IPOs on the Pakistan Stock Exchange. Similarly, our research seeks to investigate the board characteristics and corporate governance techniques that enable IPOs to not only prosper but also preserve long-term sustainability in the face of political turbulence. By identifying these best practices, we hope to give actionable insights for entrepreneurs, politicians, and investors seeking success in Pakistan's tough economic environment. Finally, the goal of this research is to contribute to Pakistan's economic flexibility by creating higher corporate governance norms that can resist political upheaval. Moreover, our goal is to promote a more strong and appealing IPO market, opening the path for sustainable economic growth in the region, through a better understanding of the delicate relationship between boards, governance practices, and political stability.\u003c/p\u003e \u003cp\u003eThis paper contributes to existing theory and literature in several significant ways. First, it offers empirical evidence on the relationship between board characteristics, political stability, and IPO performance in emerging economies, particularly Pakistan which shows different findings as compared with other nations due to the volatility in firms' stock returns due to the high political instability from the last decades and declining consecutively due to that factor. Second, this study expands upon the existing literature by exploring additional board characteristics, such as gender diversity and CEO duality, with IPO performance, Pakistan the code of the corporate governance mechanism strongly follows gender diversity in their code and timely improved their code of corporate governance concerning time for getting the benefits of the gender divert in the business, as finding suggested that the women in the board composition leads to perform well and contributed a favorable efforts towards IPO positions. Third, the study adds to the literature on the understudied area of the relationship between political stability and IPO performance, in Pakistan there is volatile politics due to the flexibility in changes the democrats political party for getting the advantages personally. Our findings suggested that political instability within the economy leads to a decrease the investor confidence in the stock markets which leads decrease in the foreign and domestic flow of capital due to political unrest creating trouble for the new IPO for their trading the shares and maintaining their capitalization. Fourth, the study contributes to the literature by employing robust analytical measures to assess IPO performance across multiple dimensions, providing a more comprehensive understanding of the impact of board characteristics and political stability on IPO performance. The different dimensions provide the magnitude and directions of the IPO performance for the long and short run which is useful for forecasting the short- and long-term investment decisions for the investors in different environments. Furthermore, this study has implications for policymakers and regulators in terms of crafting policies to maintain political stability within the economy.\u003c/p\u003e \u003cp\u003eThis study provides practical implications to the government and investors, The government makes a code of corporate governance to increase the number of corporations by improving their Initial return and Investors use the study to evaluate the corporation with an effective code of corporate governance for protecting their investment. Moreover, this study also advocates great implications for the researchers, stakeholders, and regulators.\u003c/p\u003e \u003cp\u003eThe rest of the paper organized as section 2 discusses theoretical and empirical literature with the directions of the hypothesis useful for investigation. Section 3 discusses methodology including data and sampling, variables measurement and the econometric model of the study. Section 4 is related to the analysis and findings. Moreover, the discussion is also illustrated in section 4. Section 5 is related to the conclusion and policy implications.\u003c/p\u003e"},{"header":"2. Literature review and hypothesis development.","content":"\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e \u003ch2\u003e2.1 Theoretical literature review\u003c/h2\u003e \u003cp\u003eSeveral related theories help to explain the impact of board characteristics and political instability on IPO performance. Board characteristics, such as board independence and CEO duality, can influence the level of monitoring and oversight provided by the board, which can in turn affect the agency costs associated with the IPO process (Musa, Abdul Latif, \u0026amp; Abdul Majid, 2023). Agency theory is a useful framework for understanding the relationship between board characteristics and IPO performance (Gwala \u0026amp; Mashau, \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). According to agency theory, conflicts can result in agency costs, which are the costs incurred by the firm as a result of managing these conflicts. In the context of IPOs, the board of directors plays an important role in overseeing the IPO process and ensuring that the interests of shareholders are protected (Shao, \u003cspan citationid=\"CR74\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eResource dependence theory suggests that firms rely on resources and support from external factors, such as investors and regulators that may rise to performance of the organization (Guan, Ding, Zhang, \u0026amp; Verny, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). As a result, the political instability may affect the availability and quality of these resources, which have a direct impact on IPO performance. Resource dependence theory is relevant for understanding the relationship between political instability and IPO performance because it highlights the importance of external resources for firms to succeed. Political instability can negatively impact the availability and quality of external resources, such as financing, permits, and contracts, which can in turn negatively impact IPO performance (Zhu \u0026amp; Chu, \u003cspan citationid=\"CR89\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eInstitutional theory proposes that organizations are shaped and influenced by the prevailing norms, values, and expectations of the wider institutional environment in which they function (Bruton, Ahlstrom, \u0026amp; Li, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2010\u003c/span\u003e). In the context of corporate governance and IPOs, the institutional environment can influence the adoption and effectiveness of governance practices, such as board characteristics. Institutional theory is relevant for understanding the relationship between board characteristics and IPO performance because it highlights the importance of institutional frameworks, including regulations and norms, that shape the behavior and decisions of organizations (Moore, Bell, Filatotchev, \u0026amp; Rasheed, \u003cspan citationid=\"CR64\" class=\"CitationRef\"\u003e2012\u003c/span\u003e). Institutional theory suggests that board characteristics can impact IPO performance through their influence on organizational practices and compliance with institutional governance (Zhao, Fisher, Lounsbury, \u0026amp; Miller, \u003cspan citationid=\"CR88\" class=\"CitationRef\"\u003e2017\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eScholars and practitioners from a variety of disciplines have conducted substantial research into the relationship between internal corporate governance mechanisms and a company's overall performance but there is limited study on the IPO performance. According to agency theory, independent directors often assume their oversight responsibilities with a focus on protecting the interests of external shareholders, hence reducing agency conflicts (Boachie, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). (Lepore, Landriani, Pisano, D\u0026rsquo;Amore, \u0026amp; Pozzoli, \u003cspan citationid=\"CR56\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) underline that independent directors are characterized by their objectivity and independence, motivating them to carry out their responsibilities with a strong commitment to shareholder interests, which effectively diminishes information asymmetry. The substantial contribution of independent directors lies in their ability to align with shareholder interests, playing a pivotal role in mitigating information asymmetry.\u003c/p\u003e \u003cp\u003eThe expertise of a board of directors is critical for IPO enterprises, especially when their assistance is critical in leading companies through high complexity and unpredictability. Furthermore, in the book-building process, the expertise of board members becomes critical in establishing the ultimate IPO offer price. These board members' knowledge strengthens the legitimacy of the accounting information offered in the prospectus, inspiring trust in underwriters and prospective investors. However, larger board size increases the decision-making power that is useful for the IPO for the price adjustment (Lee \u0026amp; Ko, \u003cspan citationid=\"CR54\" class=\"CitationRef\"\u003e2022a\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eCEO duality, in which the same person serves as both the CEO and Chairman of the Board, has the potential to reduce a company's performance due to the inherent risks associated with a lack of independent monitoring and accountability (Lam \u0026amp; Lee, \u003cspan citationid=\"CR52\" class=\"CitationRef\"\u003e2008\u003c/span\u003e). This structure may generate conflicts of interest, limit the board's capacity to hold the CEO accountable, limit variety of decision-making perspectives, and even create perceptions of poor governance standards. Such issues may impede long-term strategy planning, risk management, and shareholder value maximization, thereby undermining the company's overall effectiveness and performance.\u003c/p\u003e \u003cp\u003eAccording to Kazmi, Imran, Farooqi, and Shahid (\u003cspan citationid=\"CR49\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), Pakistan's overall performance has suffered as a result of political instability. Changes in government leadership on a regular basis, civil-military tensions, and persistent political upheaval have created an unpredictable business environment, inhibiting both domestic and foreign investment. As a result of this insecurity, policies have been inconsistent, regulatory changes have occurred, and there has been a lack of commitment to long-term economic planning. Furthermore, security worries and regular disturbances, such as strikes and protests, have had a negative impact on economic activity and investor confidence. These difficulties, together with issues such as corruption and inadequate infrastructure, have stifled economic growth, restricted job possibilities, and harmed the country's overall performance, making it less appealing for long-term business and economic development.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec4\" class=\"Section2\"\u003e \u003ch2\u003e2.2 Empirical Literature Review and Hypothesis development.\u003c/h2\u003e \u003cp\u003eThere are limited studies on the relationship between board characteristics, political instability and IPO performance especially in emerging economy, but some studies are helpful for providing expected directions of the dynamics between them.\u003c/p\u003e \u003cp\u003eThere is much evidence in previous literature about the board independence studies (Githaiga, Muturi Kabete, \u0026amp; Caroline Bonareri, 2022; Singh, Singhania, \u0026amp; Sardana, \u003cspan citationid=\"CR75\" class=\"CitationRef\"\u003e2019\u003c/span\u003e; Watanabel et al., \u003cspan citationid=\"CR83\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). According to Pucheta-Mart\u0026iacute;nez and Gallego-\u0026Aacute;lvarez (\u003cspan citationid=\"CR69\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), the performance of the company is positively correlated with the independence of the board. Byrd and Hickman (\u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e1992\u003c/span\u003e) investigated that organizations with more independent board members had better revenues than those with fewer independent board members in the tender offer. (Cotter, Shivdasani, \u0026amp; Zenner, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e1997\u003c/span\u003e) examined comparative results to show that firms with board independence are rewarded with high percentages of securing proposals. In the meanwhile, numerous investigations have been unable to detect a strong relationship between the independent board and firm performance. Hermalin and Weisbach (\u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e1991\u003c/span\u003e) use Tobin's Q to measure the impact of board independence on organizational performance and the relationship between the two variables. According to Dwaikat, Queiri, and Qubbaj (\u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), independent boards increase the performance of the Initial public offering. Similarly, Githaiga et al. (\u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) investigated that the independent board decreases earning management and performance.\u003c/p\u003e \u003cp\u003eTherefore, the board of directors must perform several enormous jobs and obligations during the IPO process. These include facilitating the company's access to external capital for growth, improving the company's reputation to improve competitive advantage, developing a network of contacts, and advising the company on the strategic directions required for long-term survival and success (Le et al., \u003cspan citationid=\"CR53\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). As a result, an independent board is projected to increase IPO performance. From the literature and theory mentioned above, we came up with the following hypothesis,\u003c/p\u003e \u003cp\u003e \u003cstrong\u003eH1\u003c/strong\u003e \u003cp\u003e \u003cem\u003eThere is a positive effect of board independence on IPO Performance.\u003c/em\u003e \u003c/p\u003e \u003c/p\u003e \u003cp\u003eMore recently, academics have tried to look at the effects of board gender diversity on the performance. The gender diversity has essentially been the focus of attention among decently diverse groups (Cenarro, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Female CEOs will express resources made available to them by the ideals of their gender, just as each board member conveys particular sources to the association, such as talent, competence, information, and connections outside the association (Napoli, \u003cspan citationid=\"CR68\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). According to Tao-Schuchardt and Kammerlander (\u003cspan citationid=\"CR78\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) that the performance of the organization increases due to inclusion of the women in the board composition due to the strong opinions. The existence of women broadens the ability pool, which empowers organizations to profit by the more noteworthy decisions among capable individuals (Biggerstaff, Campbell, \u0026amp; Goldie, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). According to Kirk and Gwin (\u003cspan citationid=\"CR50\" class=\"CitationRef\"\u003e2009\u003c/span\u003e), women in the board composition can make better quality decisions and the quality of policy implementation within organizations. Woolley, Chabris, Pentland, Hashmi, and Malone (\u003cspan citationid=\"CR84\" class=\"CitationRef\"\u003e2010\u003c/span\u003e) investigated that women as board members can have a greater ability to think power and improve the knowledge gained from the whole data collection and should also be appropriate for the board of executives. Cabrera-Luj\u0026aacute;n et al. (\u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) investigated that boards with gender diversity were required to focus on clear communication with employees, demand customer loyalty, and consider decent variety and corporate social responsibility. From the perspective of institutional theory, De Masi and Slomka-Golebiowska (\u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) investigated that corporations achieve authenticity by promoting women to important board positions and that their essence serves as a flag that a firm values the dedication of its women employees.\u003c/p\u003e \u003cp\u003eThe effects and influences of gender representation on the board's components have been examined in previous studies (Alhosani \u0026amp; Nobanee, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Hussain, Garc\u0026iacute;a-S\u0026aacute;nchez, Khan, Khan, \u0026amp; Mart\u0026iacute;nez‐Ferrero, \u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). According to a Grabham (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) investigation, a range of arguments are made to increase board effectiveness, and it is also suggested that male and female directors' moral practices differ significantly. Moreover, studies imply that women are more risk averse and Adams, Attah-Boakye, Yu, Johansson, and Njoya (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) reasoned that female CEOs were constantly taking risks compared to their male companions. As a result, gender diversity is projected to increase IPO performance. Considering previous theoretical and literature background, we developed the following hypothesis,\u003c/p\u003e \u003cp\u003e \u003cstrong\u003eH2\u003c/strong\u003e \u003cp\u003e \u003cem\u003eThere is a Positive effect of gender diversity on IPO performance.\u003c/em\u003e \u003c/p\u003e \u003c/p\u003e \u003cp\u003eThe size of a board reflects a company's ability to manage its contractual landscape, indicating its ability to secure and exploit critical external resources, such as external investment. This, in turn, has an impact on the overall performance of the company (Morkan, Bertels, Sheth, \u0026amp; Holahan, \u003cspan citationid=\"CR65\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). A greater board size is consequently expected to improve business performance (Samara \u0026amp; Yousef, \u003cspan citationid=\"CR72\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). This positive effect arises from the fact that each board member brings their own unique experience to the table, bringing a varied variety of abilities that can improve a company's performance, particularly in the aftermath of a financial crisis (Tejerina-Gaite \u0026amp; Fern\u0026aacute;ndez-Temprano, \u003cspan citationid=\"CR80\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). The impact of larger boards on business performance is linked to their ability to assign work based on each board member's individual competence. As a result, a larger board size is projected to increase IPO performance. On the opposite side, (Irhamni, \u003cspan citationid=\"CR44\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) conducted a study on IPO Indonesian capital market from 2012 to 2017 and discovers a negative association between board size and IPO underpricing. These findings imply that board size is a corporate governance indicator that aids in the reduction of information asymmetry. Larger boards may give favorable signals to the market in instances with high information asymmetry, reducing the compensation required by issuers during IPOs. Moreover, Coles, Daniel, and Naveen (\u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2008\u003c/span\u003e) investigated the positive significant impact of board size on the performance of the organization. In consideration of previous research, we came up with the following hypothesis,\u003c/p\u003e \u003cp\u003e \u003cstrong\u003eH3\u003c/strong\u003e \u003cp\u003e \u003cem\u003eThere is a positive effect of the board size on IPO Performance.\u003c/em\u003e \u003c/p\u003e \u003c/p\u003e \u003cp\u003eThe CEO duality has some critical results on the organization's performance. According to Chahine and Tohm\u0026eacute; (\u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2009\u003c/span\u003e), CEO duality has negative consequences on the performance of the organizations due to the burden and cannot take decisions on time. Lee and Ko (\u003cspan citationid=\"CR55\" class=\"CitationRef\"\u003e2022b\u003c/span\u003e) has also similar arguments related to the CEO duality that create the different problems for the organization. While, Erikson, Coleridge, and Bjornali (\u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) investigated that CEO duality has a positive impact due to increased performance based on the accurate problem discussion of the management and internal control. The primary responsibility of the board is to represent the interests of the shareholders and monitor the executive's operations (Garvey \u0026amp; Swan, \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e1994\u003c/span\u003e). The board's objective is to support and speak for the guidelines, therefore the CEO separation and administrator positions are also stable agency principles with problems. Although in theory, the CEO could withdraw from the decision-making regarding administration pay and execution assessment, practically speaking this is problematic because the seat has a crucial role in guiding the board and constantly collaborates with board members to determine the plan and other board of directors\u0026rsquo; guidelines (Cristofaro, Bao, Chiu, Hern\u0026aacute;ndez-Lara, \u0026amp; Perez-Calero, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Xanthopoulou, Kalantonis, Arsenos, and Kallandranis (\u003cspan citationid=\"CR86\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) investigated that fraud was increasingly common in businesses with the CEO as Chairman is one example of the detrimental effects of the CEO-chairman dual role. As a result, a CEO duality is projected to decrease the IPO performance. From theoretical and literature background, we came up with the following hypothesis,\u003c/p\u003e \u003cp\u003e \u003cstrong\u003eH4\u003c/strong\u003e \u003cp\u003e \u003cem\u003eThere is a negative effect of CEO Duality on IPO Performance.\u003c/em\u003e \u003c/p\u003e \u003c/p\u003e \u003cp\u003ePolitical instability in any country has had a significant impact on the country's economy, as evidenced by changes in the MSCI index value (Doong \u0026amp; Doan, \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Similarly, political instability led to uncertainty, lack of investment, and a decrease in economic growth (Farooq, Gillani, Subhani, \u0026amp; Shafiq, \u003cspan citationid=\"CR29\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Political instability can take many forms, including coups, civil war, and protests (Krcmaric \u0026amp; Escrib\u0026agrave;-Folch, \u003cspan citationid=\"CR51\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Such situations may erode public trust in the government, potentially resulting in reduced investments and slower economic growth (Edokat, Ngongang, \u0026amp; Zeh, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). However, an investor may be hesitant to invest in a country with political instability.\u003c/p\u003e \u003cp\u003eAccording to Burnać, Visković, and Nikolić (\u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) the capacity for growth is largely influenced by how stable its political system has been over time (regardless of whether it is democratic or not), which has to do with how prone it is to military coups or significant changes in governmental structures. Political instability diminishes the motivation to build up physical capital (Henri Aur\u0026eacute;lien, Bruno Emmanuel, Herv\u0026eacute; William, \u0026amp; Thierry, 2023). According to past studies, political instability has a large negative impact on investment, which is consistent with this point of view (Guirguis, Koimisis, \u0026amp; Camara). In addition to impeding investment decisions, political instability and turbulence slow down national growth rates and economic development overall (Asongu \u0026amp; Odhiambo, \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Guirguis et al.). Political instability is likely to restrict policymakers' time horizons, resulting in subpar short-term macroeconomic policies, (Dagher \u0026amp; Hasanov, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eAccording to Mehmood, Mohd-Rashid, and Ahmad (\u003cspan citationid=\"CR58\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), political instability in the economy leads to a decrease in the return, especially in Pakistan where large political instability has been observed in previous decades. Meluzin, Balcerzak, Pietrzak, Zinecker, and Doubravsky (\u003cspan citationid=\"CR62\" class=\"CitationRef\"\u003e2018\u003c/span\u003e) also investigated that the performance of the firms is affected by some macroeconomic factors including political instability and government policies, also concluded that the country controls this weakness then they can promote their business, especially the IPO organization, and also conclude that the political instability leads to the strikes, close of the business activities. Wang and Wu (\u003cspan citationid=\"CR82\" class=\"CitationRef\"\u003e2020\u003c/span\u003e) also concluded that politics has direct conditions on the growth of the business. In the similar way it may affect the IPO performance. Mehmood, Mohd-Rashid, Che-Yahya, and Ong (\u003cspan citationid=\"CR60\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) also investigated that there are a large number of factors that affect IPO performance including inflation, interest rates, fiscal policy, government policy, environmental factors and the political condition within the country. According to Gounopoulos, Loukopoulos, Loukopoulos, and Wood (\u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) that the performance can be affected by the country political instability and also the corporate politics within the employees, shareholders and the stakeholders, and therefore these factor will create the negative impact on the IPO performance of the organizations.\u003c/p\u003e \u003cp\u003eMoreover, Pakistan has had a long history of political instability since independence (Siyal, \u003cspan citationid=\"CR76\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). Moreover, in recent years, the Pakistan economy has been facing various political instabilities which have impacted its stability, security, and development (Rauf, Abbas, Rafiq, Shakir, \u0026amp; Abid, \u003cspan citationid=\"CR70\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). According to Imran, Murtiza, and Akbar (\u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e2023\u003c/span\u003e), economic disturbances stem from a variety of factors including political disputes, ethnic tensions, and security challenges, and also decrease the currency value due to political instability. As a result, political stability is projected to increases the IPO performance, whereas the political instability is projected to decrease in IPO performance and vice versa. On the ground of the previous literature, we developed the following hypothesis.\u003c/p\u003e \u003cp\u003e \u003cstrong\u003eH5\u003c/strong\u003e \u003cp\u003e \u003cem\u003eThere is a significant positive impact on political stability and IPO performance.\u003c/em\u003e \u003c/p\u003e \u003c/p\u003e \u003cp\u003eFurthermore, after the theoretical and empirical literature review in the context of the different economies and cultures, this study seeks to fill the two important literature gaps about corporate governance and IPO performance, Political instability and IPO performance in emerging economies that point was pointed out by Mehmood, Mohd-Rashid, Ahmad, and Tajuddin (\u003cspan citationid=\"CR59\" class=\"CitationRef\"\u003e2023\u003c/span\u003e), respectively. To fill this gap, we employed a variety of techniques and methods to add our contribution to the body of literature in the context of a merging economy like Pakistan. Similarly, previous studies use the only measure of the IPO performance such as the IPO first-day return, but our study filled this gap by including different measures such as average week return and average 30 days return as the measure of the IPO performance as the Robust analysis. Moreover, this study contains the empirical data gap, previous studies use data that does not contain any change in the corporate governance mechanism, but our study contains twofold change in the corporate governance of Pakistan. Finally, our study contains the conceptual gap related to the political instability impact on the IPO performance because political stability is the major concern in maintaining the volatility of the markets especially in emerging economies (Karmaker, Al Aziz, Palit, \u0026amp; Bari, 2023). Moreover, Pakistan has an increasing trend of political instability due to frequent changes in the government setup starting from last two decades. After the theoretical and empirical literature critical review on the relationship between the criteria and explanatory variable, we developed the conceptual framework for our study in Fig.\u0026nbsp;1.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"No\" id=\"Taba\" border=\"1\"\u003e \u003ccolgroup cols=\"2\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003e\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eFigure 1: conceptual framework\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c2\" namest=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e"},{"header":"3 Research Design","content":"\u003cdiv id=\"Sec6\" class=\"Section2\"\u003e\n \u003ch2\u003e3.1 Data and sample selection\u003c/h2\u003e\n \u003cp\u003eIn this study, we focused on the Pakistani capital market\u0026apos;s most recent IPOs, which require increasing amounts of real data to produce a reliable outcome to assess the current status of IPO success and to look into the relationship of the board characteristics and political instability with IPO performance in Pakistan. From the emerging economies, Pakistan is selected on the grounds of being the most volatile economy due to the code of the corporate governance mechanism weakness and also due to the political unrest within the economy over the last decade. For analysis, historical data from all IPOs launched in Pakistan over the last fifteen years (2008\u0026ndash;2022) was gathered. There are three reasons behind the selection of these data periods. First, it is due to the change of the code of the corporate governance mechanism in Pakistan in 2011, and second changes in corporate governance were done in February 2017. Second, in these periods (2008\u0026ndash;2022) there was much attention given by the security commission of Pakistan (SECP) for promoting the firms to initial public offering to build the business activities in promoting their economic condition by attracting foreign direct investment and also with the aim of overcome the current account losses of the balance of payments. The third reason for the period selection is the rapid change in the Pakistan political situation because this period covers the four times changes in the political government in Pakistan and also covered the large number of political strikes in that selected period by the political parties that led to political instability within Pakistan.\u003c/p\u003e\n \u003cp\u003eMoreover, board characteristics such as board size, board independence, CEO duality and gender diversity is selected from the corporate governance practices because during the IPO valuation the decision-making process is very essential for attaining the expected return and also necessary for accurate price adjustment at first time. According to Bonardo, Paleari, and Vismara (\u003cspan class=\"CitationRef\"\u003e2011\u003c/span\u003e) that the decision making and planning is necessary for the IPO valuation because the board chooses a price strategy for the IPO shares. This includes selecting the first offering price and the quantity of shares to be offered. Pricing too high may dissuade investors, while pricing too low may result in money being lost. Therefore, the first-time price adjustment may attract investors and other stakeholders.\u003c/p\u003e\n \u003cp\u003eData was collected from the Annual reports of the selected firms. The primary sources of data for this study were the Annual reports of each IPO company, the prospectus of the firms, and the annual and quarterly reports provided by the organizations. From 2008 to 2022, there was a total of 56 firms listed in the Pakistan stock exchange as IPOs. From this listed IPO there are only 49 firms that have participated in trading due to the sale of shares through underwriters and 7 firms\u0026rsquo; data is not available. Therefore, based on the trade flow of the new IPOs, we selected 49 IPO firms as a sample.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec7\" class=\"Section2\"\u003e\n \u003ch2\u003e3.2 Independent variable measurement\u003c/h2\u003e\n \u003cp\u003eThe board size is the total number of the board of directors in the board compositions of the organizations including all types of directors in the board (Abdullah, Ismail, \u0026amp; Jamaluddin, \u003cspan class=\"CitationRef\"\u003e2008\u003c/span\u003e). Board independence means the total non-executive directors in the board compositions (Abdullah et al., \u003cspan class=\"CitationRef\"\u003e2008\u003c/span\u003e) and (Afify, \u003cspan class=\"CitationRef\"\u003e2009\u003c/span\u003e). Board independence also includes the external directors that are not the shareholders of the organizations and they hired for the development of the organizations. Gender diversity means the women participate in the board composition either executive or non-executive directorship. In this study, we measured the women directors in the board composition as measured by Afify (\u003cspan class=\"CitationRef\"\u003e2009\u003c/span\u003e). CEO duality means if the CEO has a double role as the CEO of the organization and the chairman of the board then CEO duality exists in that organization. In the selected organizations if CEO duality is present then we represent by dummy variable 1 and if not then denoted by 0. Political instability means political unrest within the country and it is measured through the world governance indicators of the political stability score as used in this proxy (Alhassan, Li, Reddy, \u0026amp; Duppati, \u003cspan class=\"CitationRef\"\u003e2021\u003c/span\u003e). The political stability is measured by the WGI indicator, and it ranges from 2.5 to -2.5. The positive indicators show political stability and the negative show the political instability within the country. +2.5 value indicates higher political stability and \u0026minus;\u0026thinsp;2.50 indicates higher political instability within the economy. The measurement of an independent variable is illustrated in table 1.\u003c/p\u003e\n \u003cdiv class=\"gridtable\"\u003e\u0026nbsp;\u003ctable id=\"Tabb\" border=\"1\"\u003e\n \u003cthead\u003e\n \u003ctr\u003e\n \u003cth align=\"left\" colspan=\"7\" style=\"width: 98.4509%;\"\u003e\n \u003cp\u003e\u003cem\u003eTable\u0026nbsp;1: Measurement of independent variables\u003c/em\u003e\u003c/p\u003e\n \u003c/th\u003e\n \u003c/tr\u003e\n \u003c/thead\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eVariable Name\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eSign\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eMeasurement\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eReference\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eBoard size\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eBSIZ\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eTotal number of board of directors\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003e(Abdullah et al., \u003cspan class=\"CitationRef\"\u003e2008\u003c/span\u003e)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eBoard independence\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eBIND\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eNon-executive directors in board composition\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003e(Abdullah et al., \u003cspan class=\"CitationRef\"\u003e2008\u003c/span\u003e) and (Afify, \u003cspan class=\"CitationRef\"\u003e2009\u003c/span\u003e)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eWomen Director\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eNWD\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eTotal no. of women on Board\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003e(Afify, \u003cspan class=\"CitationRef\"\u003e2009\u003c/span\u003e)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eCEO Duality\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eCEO\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eis measured by a dummy variable 1 if CEO-Chairman roles combined; 0 if separated\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003e(Gill \u0026amp; Mathur, \u003cspan class=\"CitationRef\"\u003e2011\u003c/span\u003e), (Afify, \u003cspan class=\"CitationRef\"\u003e2009\u003c/span\u003e)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003ePolitical\u003c/p\u003e\n \u003cp\u003eStability index\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003ePS\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eMeasured by WGI indicator of political stability within the country. It ranges from 2.5 to -2.5. The positive indicators show political stability and the negative show the political instability within the country. +2.5 value indicates the higher political stability and \u0026minus;\u0026thinsp;2.50 indicates the higher political instability within the economy.\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003e(Alhassan et al., \u003cspan class=\"CitationRef\"\u003e2021\u003c/span\u003e)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\" colspan=\"7\" style=\"width: 98.4509%;\"\u003e\n \u003cp\u003e\u003cem\u003eSource: Authors\u0026apos; computations\u003c/em\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\u003cbr\u003e\u003c/div\u003e\n \u003cp\u003e\u003cstrong\u003e3.3 Dependent variable Measurement.\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003eOur main focus is IPO performance, which is determined by the first-day return (IPOR) as measured by Abbas, Ahmad-Zaluki, and Mehmood (2023 \u0026amp; Accounting, 2023 \u0026amp; Accounting, 2023); Kao, Wu, and Yang (2009) and earning per share of the first year as measured by Kao et al. (2009); Scholte Lubberink (2023). The initial public offering return of the first day is the difference between the closing and opening price of the stock prices. The measurement of the dependent variable is given in Table 2.\u003c/p\u003e\n \u003cp\u003e\u003cem\u003eTable 2: Measurement of dependent variables\u003c/em\u003e\u003c/p\u003e\n \u003ctable border=\"1\" cellspacing=\"0\" cellpadding=\"0\" width=\"681\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 18.9706%;\"\u003e\n \u003cp\u003eVariable name\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 13.0882%;\"\u003e\n \u003cp\u003esign\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 31.9118%;\"\u003e\n \u003cp\u003eMeasurement\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 36.0294%;\"\u003e\n \u003cp\u003eReference\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 18.9706%;\"\u003e\n \u003cp\u003eIPO return\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 13.0882%;\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 31.9118%;\"\u003e\n \u003cp\u003eIPO return first day\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 36.0294%;\"\u003e\n \u003cp\u003e(Abbas et al., 2023)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 18.9706%;\"\u003e\n \u003cp\u003eEarnings per share\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 13.0882%;\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 31.9118%;\"\u003e\n \u003cp\u003eEarnings per share\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 36.0294%;\"\u003e\n \u003cp\u003e(Kao et al., 2009)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n\u003c/div\u003e\n\u003cp\u003e\u003cem\u003eSource: Authors computations\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e3.4 Control variable measurement.\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eIn this study, we used the two control variables including firm size and the age of the organizations. In this research we used firm size is measured through the log of total assets of the organizations (Fujianti \u0026amp; Satria, 2020), the size of the firm depends upon the assets of their portfolios. The firm age is the number of years from the incorporation of the organization (Fujianti \u0026amp; Satria, 2020). The measurement of the control variable is also illustrated in Table 3.\u003c/p\u003e\n\u003cp\u003e\u003cem\u003eTable 3: Measurement of control variables\u003c/em\u003e\u003c/p\u003e\n\u003ctable border=\"0\" cellspacing=\"0\" cellpadding=\"0\" width=\"644\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd style=\"width: 27.795%;\"\u003e\n \u003cp\u003eVariable Name\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 17.3913%;\"\u003e\n \u003cp\u003eSign\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 30.7453%;\"\u003e\n \u003cp\u003eMeasurement\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 24.0683%;\"\u003e\n \u003cp\u003eReference\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd style=\"width: 27.795%;\"\u003e\n \u003cp\u003eFirms Size\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 17.3913%;\"\u003e\n \u003cp\u003eLSIZE\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 30.7453%;\"\u003e\n \u003cp\u003eMeasured By Total Assets and log transformation is used to compare its value\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 24.0683%;\"\u003e\n \u003cp\u003e(Fujianti \u0026amp; Satria, 2020)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd style=\"width: 27.795%;\"\u003e\n \u003cp\u003eFirms Age\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 17.3913%;\"\u003e\n \u003cp\u003eAGE\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 30.7453%;\"\u003e\n \u003cp\u003eNumber of years from the incorporation to the IPO\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd style=\"width: 24.0683%;\"\u003e\n \u003cp\u003e(Fujianti \u0026amp; Satria, 2020)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003e\u003cem\u003eSource: Authors computations\u003c/em\u003e\u003c/p\u003e\n\u003cdiv id=\"Sec8\" class=\"Section2\"\u003e\n \u003ch2\u003e3.5 Empirical estimations\u003c/h2\u003e\n \u003cp\u003e\u003cem\u003eModel 1. IPO return of the first day.\u003c/em\u003e\u003c/p\u003e\n \u003cdiv id=\"Equa\" class=\"Equation\"\u003e\n \u003cdiv class=\"mathdisplay\" id=\"FileID_Equa\" name=\"EquationSource\"\u003e$$\\:{IPOR}_{it}={\\alpha\\:}_{0}+{\\beta\\:}_{1}{BIND}_{it}+{\\beta\\:}_{2}{BSIZ}_{it}+{\\beta\\:}_{3}{CEO}_{it}+{\\beta\\:}_{4}{NWM}_{it}+{\\beta\\:}_{5}{LSIZE}_{it}+{\\beta\\:}_{6}{PROFIT}_{it}+{\\beta\\:}_{7}{AGE}_{it}+{\\beta\\:}_{8}\\text{P}\\text{S}it+{\\text{ἑ}}_{it}$$\u003c/div\u003e\n \u003c/div\u003e\n \u003cp\u003e\u003cem\u003eModel 2. Post IPO performance analysis: EPS as the IPO performance measure.\u003c/em\u003e\u003c/p\u003e\n \u003cdiv id=\"Equb\" class=\"Equation\"\u003e\n \u003cdiv class=\"mathdisplay\" id=\"FileID_Equb\" name=\"EquationSource\"\u003e$$\\:\\underset{t1}{{EPS}}.={\\alpha\\:}_{0}+{\\beta\\:}_{1}{BIND}_{it}+{\\beta\\:}_{2}{BSIZ}_{it}+{\\beta\\:}_{3}{CEO}_{it}+{\\beta\\:}_{4}{NWM}_{it}+{\\beta\\:}_{5}{LSIZE}_{it}+{\\beta\\:}_{6}{PROFIT}_{it}+{\\beta\\:}_{7}{AGE}_{it}+{\\beta\\:}_{8}\\text{P}\\text{S}it+{\\text{ἑ}}_{it}$$\u003c/div\u003e\n \u003c/div\u003e\n \u003cp\u003eIn this study, we used two statistical analysis methods, regression analysis and its robustness through random/fixed effect model, and generalized methods of movement (GMM). Regression analysis is a sophisticated statistical method used to analyze the relationship between two or more variables. To illustrate the use of regression analysis in this context, we have framed the comparison. The final phase of this examination makes use of measurable analysis to identify the relationship between board features, Political instability and IPO performance. We frequently performed regression analyses as part of our research. We compare the findings of our regression analysis to previous academic findings on the connection between board performance and business performance. For the robustness analysis, we used the random/fixed effect model, and generalized method of movement (GMM).\u003c/p\u003e\n \u003cp\u003eThe GMM method is very effective for simultaneous or structural effects. We used the GMM methods as the robustness analysis because there is a weakness of the regression methods in that it does not cover the simultaneous effect especially it failed on the structural equations. In our variables, it is doubtful that the endogenous variable IPO performance may affect the board characteristics and political instability, and at the same time board characteristics and political instability may affect IPO return also, so to investigate the real impact of the exogenous variables (board characteristics and political instability) on the endogenous variable (IPO performance) we used the GMM methods. Another reason, we used GMM methods for checking the accuracy of the results with more effectiveness through removing the autocorrelation problem between the variables.\u003c/p\u003e\n\u003c/div\u003e"},{"header":"4 Empirical Results","content":"\u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eDescriptive Statistics\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"5\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMean\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMax.\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eMin.\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eStd. Dev.\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e2.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e2.188988\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e7.224490\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e11.00000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1.674133\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.163265\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.373438\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e19.59184\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e76.00000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e19.59264\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e2.007631\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3.006542\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1.700762\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.428571\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.763763\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.00561\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.030500\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.98129\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.986328\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIPOR\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.260223\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e10.52963\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.09836\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1.517746\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e3.394061\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e19.14000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-4.43\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e4.746501\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"5\"\u003e\u003cem\u003eSource: Authors' computations\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eIn Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e4\u003c/span\u003e, the descriptive statistics are shown, The Board Independence value of the mean is 2 according to the Code of Corporate Governance 2012 there must be at least one independent director, and in the Code of Corporate Governance 2017 the amendment was made that, there should be minimum 2 independence director or there is 1/3 portion is compulsory for independent directors in the board, the role of independence director is very important in any board as any decision is taken by the board due to the independence director the decision is not one-sided or for not for the beneficial edge for some specific members due to the presence of independent directors the decision is beneficial equally for all the shareholders. So, the presence of independent directors is encouraged for the performance of IPOs. The size of a company's board of directors is a crucial aspect of its corporate governance structure. According to the Corporate Governance Act of 2011, the minimum number of directors on a board should be seven. When a board is a smaller size, it may lead to better performance for the company at any stage. On the other hand, larger boards may negatively impact a firm's performance. When the board is too large, decision-making can become more challenging due to conflicting perceptions among directors. The board may struggle to reach a final decision, resulting in inefficiencies. Additionally, larger boards typically require higher remuneration, which increases expenses for the company. Therefore, companies with larger boards may not perform as well as those with smaller, more streamlined boards. In our descriptive, political stability has the means value of -0.0056 indicating the political unrest in Pakistan in the selected period. In Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e5\u003c/span\u003e, We checked the correlation of all the variables and found all the correlation value is less than 0.80. So, we can say that there is a weak correlation between the variables.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eCorrelation Matrix of Variables Source: Authors' computations\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"9\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c9\" colnum=\"9\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIPOR\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c7\"\u003e \u003cp\u003eFSIZE\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c8\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c9\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIPOR\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.388\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.006\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.101\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.014\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.024\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.318\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.063\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.125\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.076\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.040\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.023\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.541\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.012\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e-0.075\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e0.170\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.085\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.091\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.312\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.005\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e0.261\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e0.283\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.302\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.339\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.396\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.051\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e0.142\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e-0.160\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e \u003cp\u003e-0.147\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c9\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eADF test for data stationarity\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c3\" namest=\"c2\"\u003e \u003cp\u003eADF test\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003et-statistics\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eProb\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIPOR\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-24.560\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.141\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.981\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e16.981\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.001***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.173\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.009***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.763\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.125\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.191\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e78.198\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c4\" namest=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"4\"\u003e\u003cem\u003eNote: Results are significant at 1%, 5%, and 10% levels of significance\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eTo check the data stationarity, we used the Augmented Dickey-Fuller test given in Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e6\u003c/span\u003e. The ADF test values are significant at a level of the data indicating that the data is stationary at its level, and we do not need to take the differences.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 7\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eRegression Analysis.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"11\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c9\" colnum=\"9\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c10\" colnum=\"10\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c11\" colnum=\"11\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003eModel 1\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003eModel 2\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.110\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.056*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.112\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.030**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e-0.005\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.069*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.993\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.026\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.038**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.066\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.920\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e-0.049\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.939\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.935\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.876\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e-1.987\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.875\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e-0.191\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.559\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.087\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.100*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003ePS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.006\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.097*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.025\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.051**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eR-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.6091\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.3421\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eAdjusted R-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.4754\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.3218\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eProb(F-statistic)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.0093***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.0000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eDurbin-Watson stat\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e1.9952\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e2.0182\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"11\"\u003e\u003cem\u003eNote: Results are significant at 1%, 5%, and 10% levels of significance\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eIn our results Table \u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e7\u003c/span\u003e, the R-squared and the adjusted R-squared for model 1 are 0.609 and 0.4754, respectively indicating the overall 63% changes in the IPO return is represented by the corporate governance and its control variables. The remaining effects variables are not taken in the regression which may be the limitations and future research suggestions. Similarly, the p-value of the model is significant, indicating the model fitness of the regression. Moreover, the R-squared and the adjusted R-squared for model 2 are 0.342 and 0.321, respectively, indicating the 34% change in the IPO performance is represented by the corporate governance and included control variables, and also p-value falls under significant regions indicating the model fitness.\u003c/p\u003e \u003cp\u003eOur findings of model 1 in Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e7\u003c/span\u003e, show that the board independence has a significant 10% level of significance and positive impact on the IPO return (IPOR) indicating that increase in the board independence leads to a rise in 0.110 in the IPOR of the initial public offering. Similarly, the board size has a significant and negative impact on the IPOR indicating that the increase in the board members leads to a decrease in the IPOR by 0.005. Firm age has a significant positive impact on the IPOR indicating that the higher experienced firm leads to a rise in the IPOR by 0.026. Moreover, CEO duality, firm size, and gender diversity have no significant findings that show there is the existence of an impact between them due to the cultural changes. However, Political stability has a positive impact on the IPOR due to a significant positive impact on the IPOR indicating that the improvement in political stability leads to a rise in the 0.006 in IPOR, while political instability leads to a decrease in the IPOR and vice versa. Our findings in Model 2 Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e7\u003c/span\u003e, show that board independence has a positive and significant impact indicating the increase in the independent directors leads to a rise of 0.112 in the earning per share (EPS) of the first year. Similarly, gender diversity has a significant positive impact on the EPS, it means that number of the women in the board composition leads to a rise in the 0.087 in EPS of the first-year post-IPOs. Whereas political stability has a positive impact on the EPS, indicating the increase in the political stability leads to a 0.025 increase in EPS. However, the political instability will have a negative relationship with EPS.\u003c/p\u003e \u003cp\u003e \u003cb\u003eRobustness analysis: Random effect, Fixed effect and GMM method\u003c/b\u003e \u003c/p\u003e \u003cp\u003eAny empirical study, including regression analysis, must include robustness tests. Researchers frequently utilize random effects (RE) and fixed effects (FE) models when performing regression analysis using panel data to address potential concerns such as unobserved heterogeneity or omitted variable bias. These strategies can be used to test the robustness of the initial regression analysis results. It is critical to select the correct model depending on the underlying assumptions of your data and research issue. When dealing with time-invariant unobserved heterogeneity, fixed effects are normally chosen, while random effects may be more appropriate if the assumptions of random unobserved heterogeneity hold. Therefore, we run the Housman Specification test for accuracy and selected from the random and fixed effect model. First, we estimate the random effect model then we checked it through Housman specification test (as shown in Table\u0026nbsp;\u003cspan refid=\"Tab6\" class=\"InternalRef\"\u003e9\u003c/span\u003e) that the random is effective because probability value is not significant indicating that the random effect is sufficient for the measuring intercept variation in the analysis. Moreover, when random hypothesis is accepted then we are not going forward to the fixed effect, it shows that the random sufficient and we rely on random effect results. The random effect model results are shown in Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e8\u003c/span\u003e.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 8\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eRandom Effect Method of Estimation\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"11\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c9\" colnum=\"9\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c10\" colnum=\"10\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c11\" colnum=\"11\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003eModel 1\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003eModel 2\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.220\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.112\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e-0.046\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.011\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.019\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.054\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e-0.075\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e-0.034\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.004***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e3.875\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.005***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.009\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.098\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003ePS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.098\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.075\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e \u003cp\u003e0.001***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eR-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.5912\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.4312\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eAdjusted R-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.5401\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.3913\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eProb(F-statistic)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e0.0000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eDurbin-Watson stat\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e2.0121\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c8\" namest=\"c7\"\u003e \u003cp\u003e2.1001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c10\" namest=\"c9\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c11\" namest=\"c11\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"11\"\u003e\u003cem\u003eNote: Results are significant at 1%, 5%, and 10% levels of significance\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 9\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eHousman Specification Test for Random Effect\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colspan=\"4\" nameend=\"c4\" namest=\"c1\"\u003e \u003cp\u003eNull Hypothesis: Test cross-section random effects: Random is effective\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eTest Summary\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChi-Sq. Statistic\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eChi-Sq. d.f.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCross-section random\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e12.761\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u003cb\u003e0.2571\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eOur random effect model findings shows that the board independence has significant positive relationship with the IPO performance during and post IPO indicating that the rise in the board independence leads to rise in the IPO performance by 0.220 and 0.112, respectively at both time domain. Moreover, board size has a significant negative relationship with first day return but provides significant positive relationship with performance of IPO in long run due to affect the EPS of the first year of the organizations positively. The firm age has a significant positive relationship with the IPO performance. The CEO duality has negative relationship with IPO performance during and post IPO. The firm size has also positive relationship with IPO performance. Moreover, gender diversity and political stability has a positive link with IPO performance. However, the random effect results are more validated as compared with the regression findings due to capture the random effect is found in the selected firms in the industry.\u003c/p\u003e \u003cp\u003eThe lag effect of the dependent variable is not capture by the regression, and the random effect model, therefore there is need to the method of estimation that should be very useful for capturing the lag effect of the dependent variable that should provide more accurate and reliable findings. However, Generalized methods of movement (GMM) are useful for the more robustness findings of the existing models for making results more reliable for the investigations. For the robustness analysis, by employing the difference GMM method in Table\u0026nbsp;\u003cspan refid=\"Tab7\" class=\"InternalRef\"\u003e10\u003c/span\u003e, the J-statistics value is less than 0.500 and its probability is falling under accepted criteria of the significance indicating the GMM method suitability in this study.\u003c/p\u003e \u003cp\u003eOur GMM findings improve the findings of the random effect model by improving their coefficient and also improving the level of significance in some relationship. Therefore, the directions of the relationship are not changes that show the same direction as compared with the random effect model, but their strength of relationship enhance due to new method of estimation. The improvement in strength may be due to the disparities between the expected and observed moments are suitably minimal. Moreover, the previous value of the dependent variable IPOR is useful for predicting 0.001 to the current value of IPOR. Moreover, there previous value of the EPS is also significant but its effect on current is minimum.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab7\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 10\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eResults of the GMM methods through different GMM\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eModel 1\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eModel 2\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\u003cb\u003eCoefficient\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u003cb\u003eCoefficient\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eProb.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIPOR (-1)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.009***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e-\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS (-1)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBIND\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.227\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.231\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBSIZ\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.067\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.071\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAGE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.029\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.098\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCEO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.098\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.081\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLSIZE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.007\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e5.981\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGDIV\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.018\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.099\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.132\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.079\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eJ-Statistics\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.078\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.061\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eProb(J-statistics)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.000***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"1\" nameend=\"c6\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"6\"\u003e\u003cem\u003eNote: Results are significant at 1%, 5%, and 10% levels of significance\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e"},{"header":"5 Discussions on Findings","content":"\u003cp\u003eOur results showed that when we used First Day Return as a performance metric, it suggested the presence of independent directors has improved the performance of IPOs by consulting on the issue using appropriate valuation methodologies and tools. In that context, our results are consistent with the previous findings of (Ming \u0026amp; Hock Eam, \u003cspan citationid=\"CR63\" class=\"CitationRef\"\u003e2016\u003c/span\u003e). Therefore, the interests of managers and shareholders may not always be aligned, and managers may prioritize their interests over those of shareholders and in this way consistent with the agency theory principles. Independent directors, who are not affiliated with management and have no financial or personal interests in the company, can act as a check on the power of managers and protect the interests of shareholders. This can improve the transparency and accountability of the company, which can in turn enhance the performance of the IPO. In line with our results, the stewardship theory also supports the idea that independent directors can improve the performance of IPOs (Tricker, \u003cspan citationid=\"CR81\" class=\"CitationRef\"\u003e2015\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThere is a strong negative relationship between board size and IPO performance during the initial stage of IPO taken first day return and, in this way, if the board is wide, the performance may suffer since there will be a lot of systematic thinking and opposing viewpoints in any activity, which could deter people from making sensible judgments, which are essential for the success of the company. In this way, our findings are similar to the previous findings of Githaiga et al. (\u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Moreover, consistent with the agency theory that larger boards may lead to a diffusion of responsibility and accountability, making it more difficult for directors to monitor and control management. Another theory that supports the negative relationship between board size and IPO performance is the resource dependence theory. This theory suggests that larger boards may result in more demands on company resources, such as time and money, which negatively impact the company's performance. Larger boards may also lead to more diverse opinions and interests, which can make it more difficult to align the interests of board members with those of the company. In addition, the presence of a large board may lead to a lack of communication and coordination among directors, which negatively affects the company's decision-making process and performance. The fact that there are so many directors on the board is also made known, and it is possible that having so many directors will have an impact on the company financially. Given the foregoing opinions, the performance of the IPO is therefore affected by the enormous size of the board. Inconsistent with the previous literature, our findings are opposite to Moses, Che-Ahmad, and Abdulmalik (\u003cspan citationid=\"CR66\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Moreover, from our findings, we can see that the board size has a positive relationship with EPS that shows the larger board size has the beneficial for long term efficiency of the firms due to timely decisions with large number of the brainstorming.\u003c/p\u003e \u003cp\u003eCEO duality, where the CEO also serves as the chairperson of the board of directors, often has a negative relationship with the performance of an Initial Public Offering (IPO) due to the potential for conflicts of interest and reduced accountability. In such situations, the same individual holds the highest executive and leadership positions, which can hinder independent oversight and governance. This lack of checks and balances may lead to decisions that prioritize the CEO's interests over those of shareholders, eroding investor confidence and negatively impacting the IPO's performance. Strong corporate governance, often associated with separate CEO and board chair roles, is a critical factor in achieving a successful IPO. In this way, our findings are similar with the findings of Boyd (\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e1995\u003c/span\u003e) that show the negative relationship between CEO duality and the firm performance both short and long term.\u003c/p\u003e \u003cp\u003eIn our findings, gender diversity improves IPO performance. Gender diversity, where a diverse set of perspectives, experiences, and skills are represented at the leadership and board level, can have a positive relationship with the performance of an Initial Public Offering (IPO). Gender diversity brings a wider range of insights and decision-making approaches, potentially leading to more effective problem-solving, innovation, and risk management. Companies with diverse leadership teams are better equipped to address evolving market dynamics and consumer preferences, enhancing their adaptability and competitive advantage. Moreover, gender diversity can attract a broader investor base, improve reputation, and foster better employee engagement and talent retention, all of which contribute to the overall success of an IPO. Therefore, our findings are similar with Alodat, Salleh, Nobanee, and Hashim (\u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) that shows gender diversity increases performance.\u003c/p\u003e \u003cp\u003ePolitical stability has a significant positive impact on IPO performance that indicates political stability leads to a rise in the IPOR and also useful for the long-term sustainability represented by the findings of the post IPO findings through EPS. Political instability indicates that when political unrest within the economy decreases the trading volume of the organization it leads to a decrease the performance. In this way, our results are similar to previous findings of Mehmood et al. (\u003cspan citationid=\"CR60\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) which also showed a similar effect of political instability on the economy and it has the same relationship with respect to other environments as suggested by different theories and concepts. Similarly, according to institutional theory, political instability can lead to a breakdown of the institutions that support the functioning of the economy. This can include a weakening of property rights, increased corruption, and decreased investor confidence. In an uncertain political climate, companies may encounter greater challenges in securing capital via an IPO, as investors could be less inclined to invest due to heightened risk perceptions. Another theory that explains the relationship between political instability and IPO performance is the signaling theory. According to this theory, an IPO is seen as a signal of the company's quality and potential for growth. Political instability can send a negative signal to investors, as it suggests that the business environment may be unpredictable and risky. This can lead to a decrease in investor demand for the IPO, which can in turn lower the price of the IPO and harm the performance of the company. The agency theory also supports the idea that political instability can harm the performance of an IPO. According to this theory, managers may prioritize their interests over those of shareholders. In a politically unstable environment, managers may be more likely to engage in opportunistic behavior or take actions that benefit themselves rather than the company. This can harm the performance of the IPO and ultimately harm the long-term interests of the company.\u003c/p\u003e"},{"header":"6 Summary and Conclusion","content":"\u003cp\u003eIn conclusion, board characteristics such as board independence and board gender diversity increase the performance of IPO at initial as well as post IPO. Moreover, the board size decreases the performance initially but improves the performance for a long time. CEO duality decreases the performance of IPO. Political stability improves the performance, while political unrest decreases the performance of IPO. Moreover, Table\u0026nbsp;11 shows the summary of the hypothesis decisions.\u003c/p\u003e \u003cp\u003eOur study has made a great contribution to the previous theory and literature in the following ways. First, this study provides empirical evidence on the relationship between board characteristics \u0026amp; political stability and IPO performance in emerging economies, especially Pakistan. Second, it contributed to the existing theory and literature related to the board size having both negative and positive relationship with IPO performance and it is depending on time domain. Third, board independence is necessary for the performance of IPO both short- and long-term sustainability of the organization to attract different investors, stakeholders across the globe. Fourth, gender diversity in the board composition make more rigor decisions that improve the overall performance of the organizations.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"No\" id=\"Tabc\" border=\"1\"\u003e \u003ccolgroup cols=\"7\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colspan=\"4\" nameend=\"c4\" namest=\"c1\"\u003e \u003cp\u003e\u003cem\u003eTable\u0026nbsp;11: Decision on Hypothesis\u003c/em\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"2\" nameend=\"c6\" namest=\"c5\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colspan=\"1\" nameend=\"c7\" namest=\"c7\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNo.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAlternative Hypothesis Statement\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eExpected Directions\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eDecision for Null\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e \u003cp\u003eActual Directions\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eH1\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThere is a positive effect of board independence on IPO Performance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e+\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eCompletely Reject\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e \u003cp\u003e+\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eH2\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThere is a Positive effect of gender diversity on IPO performance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e+\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eCompletely Reject\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e \u003cp\u003e+\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eH3\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThere is a positive effect of the board size on IPO Performance.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e+\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eCompletely Reject\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e \u003cp\u003e+/-\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eH4\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThere is a negative effect of CEO Duality on IPO Performance.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eCompletely Reject\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eH5\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThere is a significant negative impact of political instability and IPO performance.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c5\" namest=\"c4\"\u003e \u003cp\u003eCompletely Reject\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c7\" namest=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"7\"\u003e\u003cem\u003eSource: Author Computation\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThe study has several implications for companies considering an IPO and policymakers involved in promoting economic growth.\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eThe companies considering an IPO should carefully consider their board structure and ensure that it is optimized for success. This may involve appointing independent directors, improving board diversity, and ensuring that the board is effective in overseeing the company's operations and strategy. Companies should also consider the potential impact of political instability on their IPO performance and take steps to mitigate these risks.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eThe policymakers should focus on promoting political stability and strengthening institutions that support economic growth. This may involve improving the rule of law, reducing corruption, and providing a stable business environment that encourages investment and entrepreneurship. Policymakers should also consider the potential impact of political instability on IPO performance and take steps to mitigate these risks, such as providing incentives for companies to list during stable periods.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eThis study provided the guidelines to government for implementation of proper code of corporate governance in term of board selection mechanism that is necessary for the improvement of the IPO performance in different environment such as war, crisis and political instability.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eInvestors should carefully consider the board characteristics and political environment of companies considering an IPO before making investment decisions. This may involve conducting due diligence on the board structure and examining the political environment in which the company operates. Investors should also consider the potential impact of political instability on the performance of the IPO and the company's long-term prospects.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003eMoreover, the study also advocated the important implications for companies, policymakers, and investors. By carefully considering these factors, companies can improve their chances of success in the IPO market, policymakers can promote economic growth, and investors can make informed investment decisions. There are several limitations to the study of board characteristics and political instability on IPO performance that should be acknowledged.\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eThis study may suffer from selection bias since it only examines a specific sample of IPOs. The findings may not be generalizable to other types of IPOs or IPOs in different markets and hence, on different markets, this one be the future topic.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eSome unavailability of data about board characteristics such as qualification of the board\u0026rsquo;s members, skills, and experience is the limitation of this study and future research should be conducted on these factors based on the availability of the data.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eThis study has taken some factors and missing the other factors that affect the IPO performance due to limitations. Other factors, such as market conditions and industry trends, may also influence IPO performance and may be a future research topic.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eFinally, the study does not consider the potential impact of other factors, such as the quality of management or the company's financial performance, on IPO performance. These factors may also be important determinants of IPO performance and should be considered in future research.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e"},{"header":"Declarations","content":"\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eMuhammad Waris contributed to methodology, concept and analysis. He is the sole author and contributed to the whole paper.\u003c/p\u003e\u003ch2\u003eData Availability\u003c/h2\u003e\u003cp\u003eThe datasets generated during the current study are available from the c orresponding author on reasonable request\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAbbas YA, Ahmad-Zaluki NA, Mehmood W. (2023). Community and environment disclosures and IPO long-run share price performance. J Financial Report Acc.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eAbdullah WZW, Ismail S, Jamaluddin N. The impact of board composition, ownership and CEO duality on audit quality: The Malaysian evidence. Manage Acc Rev. 2008;7(2):17\u0026ndash;28.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eAdams K, Attah-Boakye R, Yu H, Johansson J, Njoya ET. Female board representation and coupled open innovation: Evidence from emerging market multinational enterprises. 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Electron Commer Res, 1\u0026ndash;27.\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Corporate Governance, Initial Public offering, GMM method and Pakistan","lastPublishedDoi":"10.21203/rs.3.rs-5302454/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-5302454/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003ch2\u003ePurpose\u003c/h2\u003e \u003cp\u003eThe purpose of this study is to investigate the nexus of corporate governance, political stability and Performance in IPOs of an emerging economy such as Pakistan.\u003c/p\u003e\u003ch2\u003eMaterial and Methods\u003c/h2\u003e \u003cp\u003eThe data used in this study were obtained from the annual reports of IPO-listed firms in Pakistan between 2008 to 2022. We used different methods such as regression analysis, random effect model, and GMM methods in the analysis process.\u003c/p\u003e\u003ch2\u003eFindings and Conclusion\u003c/h2\u003e \u003cp\u003e: Our results show that an independent board has a significant positive relationship with performance. Moreover, board size has both a negative and positive relationship with the performance of the IPOs. Gender diversity has a significant positive relationship with IPO performance. Moreover, the age of the firm has a significant positive relationship with IPO performance. Political stability within the country has a positive relationship with IPO performance, whereas the political instability decreases the performance and vice versa.\u003c/p\u003e\u003ch2\u003ePolicy Implications:\u003c/h2\u003e \u003cp\u003eThis study provides practical implications to the government and investors; the government makes a code of corporate governance to increase the number of corporations by improving their Initial return and Investors use the study to evaluate the corporation with an effective code of corporate governance for protecting their investment.\u003c/p\u003e","manuscriptTitle":"Nexus of corporate governance, political stability and Performance: Evidence from IPOs of an emerging economy","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2024-11-15 15:23:51","doi":"10.21203/rs.3.rs-5302454/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"a19d6cfb-e7ca-450f-aa22-955201a8dcfe","owner":[],"postedDate":"November 15th, 2024","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2025-02-24T14:09:01+00:00","versionOfRecord":[],"versionCreatedAt":"2024-11-15 15:23:51","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-5302454","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-5302454","identity":"rs-5302454","version":["v1"]},"buildId":"qtupq5eGEP_6zYnWcrvyt","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}