Initial public offering investor valuations: An examination of top management team prestige and environmental uncertainty Academic Article uri icon


  • Relying on one of the more notable entrepreneurial settings, an initial public offering (IPO), this article extends prior work on top management team (TMT) characteristics. We examine whether or not prestigious TMTs at the time of an IPO enhance organizational legitimacy and thereby provide a signal to potential investors. Because an IPO represents an entrepreneurial context characterized by high levels of uncertainty, we also consider the impact of environmental uncertainty on the TMT prestige/investor valuation relationship. We find that both an element of TMT prestige and environmental uncertainty influence investor valuations. However, we also find that the influence of prestige does not assuage investors when analyzing IPOs in different environmental conditions.

published proceedings


author list (cited authors)

  • Lester, R. H., Certo, S. T., Dalton, C. M., Dalton, D. R., & Cannella, A. A.

citation count

  • 181

complete list of authors

  • Lester, RH||Certo, ST||Dalton, CM||Dalton, DR||Cannella, AA

publication date

  • January 2006