Media Coverage and IPO Pricing around the World

Chen, Yangyang; Goyal, Abhinav; Veeraraghavan, Madhu; Zolotoy, Leon

doi:10.1017/s0022109019000486

Cited by 96 publications

(29 citation statements)

References 108 publications

(147 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Derrien (2005) provides a sentiment-based explanation to this conundrum, in which underwriter opts for a price between the intrinsic value and the hypothetical 1 Larger media coverage does not always lead to higher initial returns. Chen et al (2019) find a structural shift in the US market from pre-to post-2000 IPOs associated with enhanced visibility and reduced asymmetric information. While larger media coverage is associated with higher initial returns in the pre-2000 period, it leads to lower initial returns in the post-2000 market.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 87%

Valuation and Underpricing of Turkish Ipos

Tütüncü

2020

Journal of Business Economics and Management

View full text Add to dashboard Cite

This study utilizes prospectuses and supplementary valuation reports to investigate the relationship between underwriters’ valuation and underpricing in 113 firms going public on Borsa Istanbul. It argues that underwriter discretion in the valuation is crucial to underpricing in the Turkish market, where fixed price is the dominant method of offering and retail investor allocation is large. Building on the overpricing theories, the study hypothesizes and finds that optimistic valuation bias is a significant determinant of underwriter discounts, and underwriter discounts are negatively associated with initial returns. One standard deviation increase in deliberate discounts is associated with a 30.4% reduction in underpricing. The median underwriter discount in the sample is 21%, while the median market-adjusted initial return is a small 1.45%, indicating that discounts might not be designed to induce underpricing and reward investors. Book-built offerings are overvalued and overdiscounted; however, not underpriced, contrasting the information extraction view.

show abstract

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 87%

Valuation and Underpricing of Turkish Ipos

Tütüncü

2020

Journal of Business Economics and Management

View full text Add to dashboard Cite

show abstract

“…In addition, Fang and Peress (2009) and Kothari et al (2009) use U.S. firms, while our study focuses on international markets, in which the role of media may be relatively limited. Our article differs from Chen et al's (2019) study in that we examine the long-term impact of media coverage on firm performance by using a comprehensive panel dataset of media coverage, while Chen et al (2019) focus on the pricing effect of media coverage around IPO events. Wang and Ye (2015) investigate the relation between media coverage and firm valuation in China.…”

Section: Relation To the Existing Literaturementioning

confidence: 96%

Media attention and firm value: International evidence

2020

View full text Add to dashboard Cite

We investigate the relation between media attention and firm value and whether this relation varies across different institutional and information environments. Using a comprehensive dataset of global media from 41 countries for the period between 2000 and 2010, we find that media coverage is positively associated with firm value. In addition, we find support for two channels through which the value effect of media coverage operates: the information asymmetry reduction channel and the monitoring channel. Importantly, we document that the positive association between media coverage and firm value is stronger for firms in countries with weak institutional characteristics or less transparent information environments. Our findings provide additional insights into the role of the media in international equity markets.

show abstract

“…Bajo and Raimondo (2017) find that favourable media coverage is associated with IPO under-pricing positively, because of the increased demand for the stock, and this, in turn, maximizes first-day returns. Recently, Chen et al (2020), using a broad sample of IPOs across the world, find that high media coverage of pre-IPOs is negatively related to the IPO initial returns. This outcome supports the notion that media coverage reduces the information asymmetry amongst investors.…”

Section: Media Coverage and Financial Report Restatementsmentioning

confidence: 99%

Media coverage and financial restatements: evidence from China

Alkebsee

Habib

2021

ARA

View full text Add to dashboard Cite

PurposeDrawing on the premise that the media play a vital corporate governance role, this paper aims to investigate the association between media coverage and financial report restatements.Design/methodology/approachBased on a sample of Chinese listed companies over the period 2011–2015, the authors use ordinary least squares regression as well as a number of additional tests. To mitigate the endogeneity issue, the authors use a two-stage Heckman test and a propensity score matching model.FindingsThe authors document a negative and significant association between media coverage and restatements, suggesting that firms with high media coverage engage less in financial restatements. The authors further explore the moderating effects of internal control quality and state ownership on the association between media coverage and restatements. Regression results reveal that the governance role of the media is more pronounced for state-owned enterprises than for private firms. However, no significant difference in the disciplining effect of media coverage is found for firms with high, versus low, internal control quality.Originality/valueThe role of the media in corporate governance and financial reporting quality has been well documented. In emerging economies, such a role has been overlooked. As a result, the purpose of this study is to fill that void. Furthermore, prior research ignores the impacts of state ownership and the internal control environment on the media's governance role.

show abstract

Media Coverage and IPO Pricing around the World

Cited by 96 publications

References 108 publications

Valuation and Underpricing of Turkish Ipos

Valuation and Underpricing of Turkish Ipos

Media attention and firm value: International evidence

Media coverage and financial restatements: evidence from China

Contact Info

Product

Resources

About