CEO International Experience and IPO Success: The Moderating Effects of Cultural Distance and Information Asymmetry

This study examines how CEO international experience influences initial public offering (IPO) success and investigates the moderating effect of cultural distance between the countries where CEOs gained experience and the underwriters' national origins. Drawing on data from 368 companies that went public on the KOSPI and KOSDAQ markets between 2014 and 2019, the research confirms that CEOs with international experience positively contribute to IPO success. However, this positive effect diminishes when there is greater cultural distance between the countries of the CEO’s experience and the underwriter’s nationality. The research further identifies information asymmetry as a significant boundary condition, revealing that when information asymmetry between IPO firms and external investors is higher, the positive impact of CEO international experience on IPO success becomes more pronounced. To address potential endogeneity concerns, we employed an instrumental variable approach, which generally confirmed the findings regarding both the primary relationship between CEO international experience and IPO success as well as the moderating effect of information asymmetry.