Conscientiousness and IPO first-day underpricing

We document that state-level conscientiousness is negatively associated with the initial public offering (IPO) first-day return. Exploring the economic mechanisms, we find that IPO firms originating in states that have a high level of conscientiousness experience longer IPO processes and hire more, but less reputable underwriters. Furthermore, issuers in highly conscientious states are less inclined to exchange IPO first-day return for coverage by all-star analysts. Our findings suggest that high conscientiousness stimulates issuers' negotiation incentives towards underwriters. These findings highlight state-level personality traits as a crucial determinant of IPO market pricing dynamics.