Information quality and the valuation of new issues

Titman, Sheridan; Trueman, Brett

doi:10.1016/0165-4101(86)90016-9

Cited by 993 publications

(590 citation statements)

References 11 publications

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“…More specifically, its country of origin and choice of country of listing may be used as other signaling factors and, as a result, the IPO firm is involved in a complex process of evaluating costs and benefits of various signaling mechanisms in search of an optimal combination that minimizes both information asymmetry and costs of signaling (Titman and Trueman, 1986). Ang and Brau (2003), for example, suggest that an IPO allows multiple signals, including positive signals, making the confounding strategy possible.…”

Section: Discussionmentioning

confidence: 99%

“…Previous research has found that strategic actions such as increasing the level of international operations and board insider ownership effectively mitigate the effect of negative country of origin signals when going public (Bell et al, 2008). As a result, the IPO firm is involved in a complex process of evaluating the costs and benefits of various signaling mechanisms in search of an optimal combination that minimizes both information asymmetry and costs of signaling (Titman and Trueman, 1986). One strategic action that foreign IPOs can take to mitigate negative country of origin effects is to increase board independence levels.…”

Section: Interactive Effects Of Board Independence and Investor Protementioning

confidence: 99%

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Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects

Bell

Moore

Filatotchev

2012

Journal of Business Venturing

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Section: Discussionmentioning

confidence: 99%

Section: Interactive Effects Of Board Independence and Investor Protementioning

confidence: 99%

Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects

Bell

Moore

Filatotchev

2012

Journal of Business Venturing

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“…We confirm this by running a simple version of regression R1 restricted to the subsample of bookbuildings not marketed in the U.S. (this corresponds to the comparison of means in the last block of Table 6). The estimate for the U.S. bank dummy in this regression R4 indicates that U.S. [Titman and Trueman (1986)], in which case their degree of underpricing should be lower in domestic deals.…”

Section: Cost Functions For Bookbuilding and Fixed-price Offersmentioning

confidence: 99%

Global Integration in Primary Equity Markets: The Role of U.S. Banks and U.S. Investors

Ljungqvist

Jenkinson

Wilhelm

2003

Review of Financial Studies

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We examine the costs and benefits of the global integration of primary equity markets associated with the parallel diffusion of U.S. underwriting methods. We analyze both direct and indirect costs (associated with underpricing) using a unique dataset of 2,132 IPOs by non-U.S. issuers from 65 countries in 1992-1999. Bookbuilding typically costs twice as much as a fixed-price offer, but on its own, does not lead to lower underpricing. However, when conducted by U.S. banks and/or targeted at U.S. investors, bookbuilding can reduce underpricing significantly, relative to fixed-price offerings or bookbuilding efforts conducted by 'local' banks. These results are obtained after allowing for the endogeneity and interdependence of issuers' choices. For the great majority of issuers, the gains associated with lower underpricing outweighed the additional costs associated with hiring U.S. banks or marketing in the U.S. This suggests a quality/price trade-off contrasting with the findings of Chen and Ritter [Journal of Finance 55, 2000], particularly since non-U.S. issuers raising US$20m-80m also typically pay a 7% spread when U.S. banks and investors are involved. Global Integration in Primary Equity Markets:The Role of U.S. Banks and U.S. Investors AbstractWe examine the costs and benefits of the global integration of primary equity markets associated with the

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“…More specifically, the additional feature that the cost of reports increases with WKHLU DFFXUDF\ PDNHV LW SODXVLEOH WR LQWHUSUHW WKH SUHFLVLRQ OHYHOV DV PHDVXUHPHQWV RI DQ DXGLWRU ¶V quality (or of the reliability of any outsider who assesses the environmental impact of the current industrial activity). Concerning the choice of auditor by an opportunistic firm, Titman and Trueman [25] argued earlier that the more benign the industrial activity the higher the quality of the auditor, whilst Hughes [12] showed that a firm's handling of a safe activity may not necessarily induce higher auditor quality if there are other means (e.g., ownership in the project) by which the firm could signal her goodwill. The above analysis brings these opposite conclusions together: according to proposition 2, cost and payoff functions that satisfy consition (5) induce a monotone relationship between harmlessness and audit quality, but functions inconsistent with that condition make the safe as well as the dangerous firm agree on their choice of auditor.…”

Section: Relationships With the Existing Literaturementioning

confidence: 99%

A theory of environmental risk disclosure

Sinclair‐Desgagné¹,

Gozlan²

2003

Journal of Environmental Economics and Management

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CIRANOLe CIRANO est un organisme sans but lucratif constitué en vertu de la Loi des compagnies du Québec. Résumé / AbstractLa réglementation des risques environnementaux met de plus en plus l'accent sur l'information et la responsabilisation des parties prenantes. Le succès de cette approche repose toutefois largement sur la qualité de l'information fournie par les entreprises visées. Cet article porte sur la quantité et la qualité de l'information qui serait volontairement fournie à une partie prenante par un pollueur potentiel. On trouve que cette information sera moins précise lorsque la partie prenante est confiante (voire naïve) a priori, que le coût d'analyse de l'information livrée croît avec la complexité de celle-ci, ou que le revenu attendu par une entreprise se révélant être en non conformité est petit. En revanche, une partie prenante inquiète et un faible coût de production de données précises encouragent la livraison d'une information de meilleure qualité. La précision de l'information livrée permet à une firme sûre de se distinguer d'autant plus facilement d'une firme dangereuse que son revenu ex post est relativement plus élevé. À la lumière de notre modèle, on examine en terminant plusieurs principes se rapportant au design des programmes publics de révélation des risques à la santé et à l'environnement.

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Information quality and the valuation of new issues

Cited by 993 publications

References 11 publications

Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects

Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects

Global Integration in Primary Equity Markets: The Role of U.S. Banks and U.S. Investors

A theory of environmental risk disclosure

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