CEO Dominance and Newly Public Firms’ Survival

An initial public offering (IPO) is an important milestone for private firms. Unfortunately, post-IPO firms face many internal and external challenges leading to high failure rates. Yet, the literature remains relatively silent on how newly public firms can decrease this risk. We examine how CEO dominance, as captured using a non-intrusive measure via CEO facial appearance, reduces post-IPO failure. Drawing on a sample of newly-public Internet firms during early 2000s we find CEO dominance generally reduces failure rates; however, it can be counter-productive when the CEO holds too much power (i.e., also one of the founders) or when the business model is more complex and needs to win approval from various stakeholders. Our work contributes to the larger body of work on executive leadership in newly public firms, and in doing so, offers new insight into IPOs and leadership and contributes to the study of macro and micro processes in upper echelons.