Institutional quality and initial public offering underpricing: Evidence from Hong Kong

et al. 2023

AGJSR

PurposeThe purpose of this study is to examine the associations between board size, board independence and triple bottom line (TBL) reporting. The TBL report consists of three components, namely, environmental, social and economic indices.Design/methodology/approachThis study’s sample consists of top 50 listed companies from the year 2017 to 2019 on Tadawul Stock Exchange. Ordinary least squares, quantile least squares and robust least squares are used to investigate the associations between board characteristics and TBL reporting, including its separate components.FindingsThe authors find a significant negative association between TBL reporting and board independence. Social bottom line is significantly and negatively related to board size and board independence. Results indicate that board independence negatively influences the TBL disclosure of companies. Therefore, companies are encouraged to embrace TBL reporting. This suggests that businesses should improve the quality of their reporting while ensuring that voluntary disclosures reflect an accurate and fair view in order to preserve a positive relationship with stakeholders.Originality/valueThe present study explains the evidence for the determinants of the TBL in Saudi Arabia.

Section: Agjsrsupporting

confidence: 79%

Section: Board Size Board Independence Tbl Reportingmentioning

confidence: 99%

The influence of board size and board independence on triple bottom line reporting

Tajuddin

Akter

et al. 2023

AGJSR

“…Companies are more likely to go public if the stock market provides high returns that ensure profits for both the company and the investors. As a result, equity investors prefer to earn a higher initial return on newly listed stocks to maximize compensation while facing higher risk due to low country-level institutional quality (Wei et al, 2021). As a result, higher returns from newly listed stocks are regarded as the most powerful signals for displaying valuable information.…”

Section: Literature Review 21 Stock Market Index and Ipo Variabilitymentioning

confidence: 99%

Factors driving IPO variability: evidence from Pakistan stock exchange

Mehmood

Ong

et al. 2021

JEFAS

Self Cite

PurposeThe objectives of this study are twofold. First, it intends to investigate the symmetric link between initial public offering (IPO) variability and the determinants of the stock market index, treasury bill rate, inflation, GDP growth rate and foreign direct investment. Second, this study intends to examine the asymmetric link between IPO variability and the aforementioned determinants, namely the stock market index, treasury bill rate, inflation, GDP growth rate and foreign direct investment.Design/methodology/approachData from 1992 to 2018 were gathered from the country of Pakistan in order to achieve the above objectives. Augmented Dickey–Fuller (ADF) and Phillips Perron (PP) unit root tests were employed to determine the data's stationarity properties. The Auto Regressive Distributive Lags (ARDL) model was utilized to examine the symmetric links, and the Non-Linear Auto Regressive Distributive Lag Model (NARDL) was employed to determine the asymmetric links. While the long-run co-integration was examined using the ARDL bound test, the short-run dynamics were tested using the error correction method (ECM).FindingsThe macroeconomic variables of the stock market index, treasury bill rate, inflation, GDP growth rate and foreign direct investment are found to pose significant short-run and long-run symmetric and asymmetric effects on IPO variability. These results indicate the significance of the aforementioned variables in enhancing IPO variability. The findings also demonstrate the typical reactions of inflation, GDP and FDI towards negative and positive shocks in IPO variability and inflation. This evidence implies that Pakistan's poor capital market development is reflected in the country's weak macroeconomic factors. At the same time, the reduced IPO variability in the country also reflects the lack of confidence among prospective issuers and investors due to Pakistan's weak macroeconomic indicators.Originality/valueThis is the first study of its kind to properly investigate the symmetric and asymmetric effects of the macroeconomic variables on Pakistan's IPO variability.

“…We expect the impact will vary on different levels of the lockup ratio, and it is important to identify the factors influencing different subgroups of the lockup ratio. Previous studies have also used quantile regression to explain IPO anomalies (see Mehmood et al, 2020; Mehmood et al, 2021; Wei et al, 2021). In this study, we used the lowest quantile (i.e., the 25th quantile), median (i.e., the 50th quantile), and the highest quantile (the 75th quantile).…”

Section: Measurement Of Variables and Model Specificationmentioning

confidence: 99%

The role of mandatory lockup ratios in initial public offerings

Journal of Public Affairs

Abdul-Rahim

Khaw

et al. 2021

Self Cite

This paper examines the potential explanations for Initial Public Offering (IPO) lockup provisions. This study uses cross‐sectional regression, robust least squares, and quantile regression on data for the period from 2000 to 2014. We explore the explanation of lockup as (i) a signal of firms' commitment to alleviate the moral hazard problem, or (ii) a signal of firms' qualities. The results document that firms retain higher proportions of their shares as a signal of commitment rather than quality. Besides that, firms with higher lockup ratios are more likely to engage high‐quality underwriters for their listing exercise. The findings suggest that although the regulation requires major shareholders to lockup their entire shareholdings until 6 months after the IPO listing, they tend to keep higher proportions than the minimum requirement of 45% of the enlarged issued and paid up capital as a signal of commitment towards reducing the moral hazard problem. Thus, investors should recognise the signalling role of the lockup provision when they make investment decisions. Policymakers need to pay attention to the formulation of lockup provisions. While lockup is mandatory, the different percentages of shares locked up are of interest to this study. Further, the findings highlight the importance of lockup provisions in boosting the confidence of investors to participate in IPOs. This study provides new empirical evidence regarding the role of the lockup provision.