Issuers’ incentives and tests of Baron’s model of IPO underpricing

Chen, Hsuan‐Chi; Fok, Robert C.W.; Kang, Sheng-Hung

doi:10.1007/s11156-009-0148-5

Cited by 6 publications

(1 citation statement)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As underwriters and company directors are required to provide reliable information to prospective investors, they may be held legally responsible for providing false information in the prospectus if the stock is overpriced. Chen et al (2009) compare the underpricing of self-marketed underwriter IPO (investment banks that participated in the distribution of their own securities) with the non-self-marketed underwriter IPO and find that self-marketed IPO exhibit less underpricing. They argue that it is because the asymmetric information problem between the issuer and underwriter is eliminated.…”

Section: Introductionmentioning

confidence: 99%

An Examination of the Underpricing of H-Share IPOs in Hong Kong

Chong

Yuan

Yan³

2010

Rev. Pac. Basin Finan. Mark. Pol.

View full text Add to dashboard Cite

The main purpose of this paper is to study the empirical determinants of the underpricing of H-share initial public offerings (IPOs) during the 1993-2003 period. A special characteristic of H-shares is that they are shares of companies incorporated in China, but are also listed abroad. Our estimates indicate that the average IPO underpricing level of H-shares was about 16.8%. We find that the conventional explanations for the worldwide IPO underpricing are not adequate in explaining the underpricing level of H-shares. Some new factors that are important in explaining the underpricing phenomenon in H-shares are identified. We show that the degree of IPO underpricing is positively associated with market conditions prior to issuance. It is also negatively related to the range of the issuing prices as well as to the growth rate of historical profits. In addition, it is found that firms cross-listed in Hong Kong and America have higher underpricing levels.

show abstract

Section: Introductionmentioning

confidence: 99%

An Examination of the Underpricing of H-Share IPOs in Hong Kong

Chong

Yuan

Yan³

2010

Rev. Pac. Basin Finan. Mark. Pol.

View full text Add to dashboard Cite

show abstract

Underwriter reputation and underpricing: evidence from the Australian IPO market

Dimovski

Philavanh

Brooks

2010

Rev Quant Finan Acc

View full text Add to dashboard Cite

Dimovski and Brooks (J Intern Financ Mark Inst Money 14:267-280, 2004b) examined 358 Australian industrial and mining company initial public offerings (IPOs) from 1994 to 1999 to report that more money was left on the table by IPOs that engaged underwriters than those that did not engage underwriters. Loughran and Ritter (Autumn 5-37, 2004) suggested that the negative relation between underwriter reputation and underpricing has reversed in the 1990s with U.S. IPOs. The main purpose of this paper is to study the relationship between underwriter reputation and underpricing in terms of Australian IPO data. In this paper, we use 380 Australian industrial company IPOs from 1994 to 2004 to perform the empirical study. Our results suggest that more prestigious underwriters are associated with a higher level of underpricing. Other variables that are found to be significant in explaining the level of IPO underpricing are market sentiment, share options, total capital raised and underwriter options.

show abstract

A theory of underwriters’ risk management in a firm-commitment initial public offering

Mantell

2014

Rev Quant Finan Acc

View full text Add to dashboard Cite

Issuers’ incentives and tests of Baron’s model of IPO underpricing

Abstract: Initial public offering, Incentives, Underwriter, G32,

Cited by 6 publications

References 30 publications

An Examination of the Underpricing of H-Share IPOs in Hong Kong

An Examination of the Underpricing of H-Share IPOs in Hong Kong

Underwriter reputation and underpricing: evidence from the Australian IPO market

A theory of underwriters’ risk management in a firm-commitment initial public offering

Contact Info

Product

Resources

About