Fixed price and book building methods in an exogenous environment: Evidence from Indonesia stock market

Hanafi, Mamduh M.

doi:10.1016/j.ribaf.2021.101430

Cited by 7 publications

(12 citation statements)

References 54 publications

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“…The variables used in this research consist of opening return, closing return, initial return, IPO method, IPO Value, IPO Percentage, market volatility, market return, ROA, total asset, and PBV. The definition and measurement of each variable adopts variable definition in Hanafi [6]. The Definition of variable is summarized in Table 1.…”

Section: Methodsmentioning

confidence: 99%

“…The mean of IPO percentage in fixed price method is 22,85% and 23,7% in book building method. Refer to [6] states that this number is typical in Indonesia. This IPO Percentage is comparable with previous research from [6].…”

Section: Ipo Methods and Return Variablementioning

confidence: 99%

“…Surprisingly, the IPOs, itself has never become the focus of attention of either researchers or practitioners of finance world. The general focus of IPO research is early returns that newly listed firms' stock prices record [6].…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…The choice of an IPO method is permit in countries such as France, Japan, and Taiwan. However, most companies have shifted to book building methods [5][6][7]. Hanafi [6] believes that this situation provides a one-of-a-kind opportunity to investigate the factor affects return, volatility and underpricing, for example is the effect of IPO method.…”

Section: Introductionmentioning

confidence: 99%

“…However, most companies have shifted to book building methods [5][6][7]. Hanafi [6] believes that this situation provides a one-of-a-kind opportunity to investigate the factor affects return, volatility and underpricing, for example is the effect of IPO method. Furthermore, the Indonesian offers free setting from the endogeneity issues associated with IPO methods and it is important to studying variables affect return, volatility or underpricing.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Book Building vs Fixed Price Revisited: The Case of Indonesia

Utami

Irawan²

2022

REAKSI

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We revisited the evidence on how IPO methods affect return (opening, close and initial return) and why does return affects the volatility in Indonesia. As one of the emerging countries, Indonesia had a changing regulation regarding the IPO method from the fixed price to the book building method since October 2000. Using a clustering regression analysis method, we find that the opening price and initial price in the book building period are significantly higher than that in the fixed price period. Furthermore, there is no effect of the opening return on the volatility. In contrast, closing return affects the volatility positively, while the relationship between initial return and volatility shows somewhat mixed results.

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Section: Methodsmentioning

confidence: 99%

Section: Ipo Methods and Return Variablementioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%