Performance differences between IPOs in new industries and IPOs in established industries

Ang, James S.; Boyer, Carol M.

doi:10.1108/03074350910960346

Cited by 14 publications

(9 citation statements)

References 22 publications

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“…As the table indicates, dividend rates vary across industries (Lintner 1956), and the majority of return rates are over 10%, which is the minimum rate required by the GEMC. As an emerging and promising industry in China, the BI sector has the highest return rate, which is in line with the finding of Ang and Boyer (2009), who show that the new industries provide investors with significant returns over five years. In addition, the sectors with high returns are generally manufacture-related industries, while the agriculture-based sector MA has the least returns, due to the fact that China's economy is in transition to industrialisation.…”

Section: Regression Model Testsupporting

confidence: 86%

Examining IPO Success in the Emerging Growth Enterprise Market of China

Long¹,

Zhang²

2014

GEFJ

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Section: Regression Model Testsupporting

confidence: 86%

Examining IPO Success in the Emerging Growth Enterprise Market of China

Long¹,

Zhang²

2014

GEFJ

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“…Extensive research tests the short run and long run performance of IPOs (Loughran and Ritter, 1995;Jenkinson and Jones, 2009;Ang and Boyer, 2009;Lewellyn and Bao, 2014). Previous research in the USA markets (Brav, Geczy and Gompers, 2000), UK (Levis, 1993;Goergen, Khurshed, A and Mudambi, 2007) and other international markets (Lee, Taylor and Walter, 1996;Kooli and Suret ,2004;Killins and Egly, 2018) find similar findings of IPO under-performance.…”

Section: Related Literaturementioning

confidence: 99%

An empirical analysis of the performance of sponsored vs non-sponsored IPOs

Sivaprasad

Dadhaniya

2019

JAEE

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Purpose India is one of the largest IPO markets in the world. However, IPO research in the developing world is limited. The purpose of this paper is to test the performance of Indian IPOs based on sponsored vs non-sponsored issues. The authors classify the IPO sample into venture capital (VC) and private equity (PE) sponsored issues and non-sponsored ones and include key operating characteristics as performance predictors. Design/methodology/approach The dependent variable is the buy-and-hold abnormal returns. The study uses key operating characteristics such as market capitalization, net sales, earnings before interest, taxes, depreciation and amortization, depreciation and amortization, price-to-book, asset turnover and leverage. A cross-sectional analysis is applied to test the long-run performance. Findings Sponsored IPO issues convey favourable information to investors about future earnings and prospects of the firm. The findings indicate that sponsored issues and, in particular PE sponsored issues are perceived by investors as having a positive impact on the operational performance of firms that the PE firms are involved in relative to the constituents of the index and this superior operational performance over time also leads to relatively better performing share prices. There are significant differences in terms of market size, industry classification and key operating characteristics across the three groups of issues. Research limitations/implications This study has had to deal with much smaller samples of PE and VC when compared to similar studies conducted in the developed markets such as the UK and the USA. Further robustness tests on the market performance using factor models posed a problem due to limitation of the availability of these factors. Practical implications For the capital markets investors and policy makers, this research demonstrates the increasingly important role that PE and VC funds play in the investment landscape in India. It exhibits the increasing investor confidence in the Indian capital markets. Originality/value Using a sample of Indian IPOs comprising VC sponsored and PE sponsored issues, this study analyses the performance of Indian IPOs in an emerging market setting. This study, thus, contributes to the limited IPO research undertaken in developing markets.

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“…Like previous studies, the chosen sample of Indian offers also reported negative returns in long-run (e.g. Ang and Boyer, 2009;Kumar, 2007;Sahi and Lee, 2011;Tsangarakis, 2004).…”

Section: Discussionmentioning

confidence: 78%