Initial public offerings of equity securities

Wang, Ко; Chan, Su Han; Gau, George W.

doi:10.1016/0304-405x(92)90039-z

Cited by 125 publications

(101 citation statements)

References 36 publications

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“…Our paper extends the research of Wang et al (1992) and Ling and Ryngaert (1997), by investigating European property share markets. Following Wang et al (1992), we use the aftermarket standard deviation to quantify the ex-ante uncertainty surrounding the true value of the issue.…”

Section: Literaturementioning

confidence: 65%

“…Wang et al (1992) were the ®rst to investigate the presence of IPO underpricing in a property share market. They reported a statistically signi®cant average abnormal return of À 2.99 percent on the ®rst day of trading for the U.S. REIT market.…”

Section: Literaturementioning

confidence: 99%

“…Following Wang et al (1992), we use the aftermarket standard deviation to quantify the ex-ante uncertainty surrounding the true value of the issue. We expect companies with high aftermarket standard deviations to be associated with higher initial day returns.…”

Section: Literaturementioning

confidence: 99%

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Initial Public Offerings: Evidence from the British, French and Swedish Property Share Markets

Brounen

Eichholtz

2002

New Directions in Real Estate Finance and Investment

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This paper investigates the underpricing and long-run performance of initial public offerings (IPOs), using a unique sample consisting of 54 British, French and Swedish property companies, which became publicly listed during the period 1984±1999. Similar to common stock IPOs, the European property share IPOs in our sample outperformed the benchmark on the ®rst day of trading, on average with 2.55 percent. However, these property share IPOs tend to underperform their benchmark over the twelve-month period subsequent to the initial offering. We also examine explanatory factors such as issue size, the degree of debt ®nancing, ex-ante uncertainty, and the underlying property types of the companies involved. The results are in line with those previously found for common stocks.

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Section: Literaturementioning

confidence: 65%

Section: Literaturementioning

confidence: 99%

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Initial Public Offerings: Evidence from the British, French and Swedish Property Share Markets

Brounen

Eichholtz

2002

New Directions in Real Estate Finance and Investment

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“…Similarly Real Estate Investment Trusts (REITs) the nearest equivalent to UK property companies (Canon and Vogt, 1995), have shown negative average initial returns. Specifically, Wang, Chan and Gau (1992) in a study of 87 REITs IPOs over the period 1971-88 reported a significant negative average initial return of -2.82 per cent. Below, Zaman and McIntosh (1995) in a study of 58 REITs over the period 1972-89 similarly reported minor negative average initial returns.…”

Section: Non-industrial Iposmentioning

confidence: 99%

The initial return performance of UK property company IPOs

Sahi

2001

Journal of Property Investment &Amp; Finance

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“…5 Furthermore, REITs are well-suited for the study of agency issues related to capital structure because their tax-advantaged status, high required dividend payout, and uniform asset regulation eliminate or reduce the need to control for potentially confounding effects such as tax considerations or variations in dividend payout rates. 6 Previous studies that have used REITs to study corporate finance issues include Gentry et al (2003), Ling and Ryngaert (1997), Damodaran and Liu (1993), Wang et al (1992), Jaffe (1991), Shilling and Howe (1988), and Allen and Sirmans (1987).…”

Section: Introductionmentioning

confidence: 99%

How Entrenchment, Incentives and Governance Influence REIT Capital Structure

Ghosh

Giambona

Harding

et al. 2010

J Real Estate Finan Econ

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Although recent literature has confirmed the importance of viewing a firm's capital structure choices of leverage and debt maturity as jointly determined, to date there has been little analysis of the importance of traditional governance variables on a firm's capital structure decisions using a simultaneous equations approach. We examine the influence of managerial incentives, traditional managerial monitoring mechanisms and managerial entrenchment on the capital structure of Real Estate Investment Trusts (REITs). Using panel data, we estimate a system of simultaneous equations for leverage and maturity and find that firms with entrenched CEOs use less leverage and shorter maturity debt. This is consistent with the expectation that managers acting in their own self interest will choose lower leverage to reduce liquidity risk and use short maturity debt to preserve their ability to enhance their compensation and reputations by empire building. We also find evidence that traditional alignment mechanisms such as equity and option ownership have an offsetting effect; and that firms where the founder serves as CEO choose higher leverage and longer maturity debt. The results also provide evidence that leverage and maturity are substitutes, firms with high profitability and growth opportunities use less leverage and firms with liquid assets use more leverage and longer maturity debt.

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Initial public offerings of equity securities

Cited by 125 publications

References 36 publications

Initial Public Offerings: Evidence from the British, French and Swedish Property Share Markets

Initial Public Offerings: Evidence from the British, French and Swedish Property Share Markets

The initial return performance of UK property company IPOs

How Entrenchment, Incentives and Governance Influence REIT Capital Structure

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