Presence of analyst before IPO and underpricing: a Meta-analysis.

Abstract

The effect of analyst presence on underpricing has shown a contrasting result. By synthesizing the result using meta-analysis for twelve studies with more than 20400 firms we found conclusive evidence of the relation between analyst presence and underpricing of IPOs. With the increase in analyst presence by 1% the IPO underpricing increases by 4.9%. Moreover, meta-regression between effect size and moderator variables found the significant and positive role of the reputed underwriter to increase underpricing when the IPO has coverage of analysts. Our results are striking for the US market IPOs in which reputed underwriters as moderator affect underpricing significantly and positively which shows reputation increase information asymmetry. Whereas in emerging markets IPOs reputed underwriters increase market efficiency and information symmetry.

Determinants of Ipo Oversubscription on Islamic Stocks: Evidence From Indonesia

“…In the literature, factors that cause the oversubscription in the IPOs have received substantial attention (Avci, 2021;Dong et al, 2021;Gupta, Singh, & Yadav, 2022;Hoque & Mu, 2021;Payne, Trudell, Moore, Petrenko, & Hayes, 2022). These include investor demand (Arora & Singh, 2020;Mensi, Lee, Vinh Vo, & Yoon, 2021); promotional activities (Arora & Singh, 2020;Lan & Khoi Thach, 2022); previous number of IPO's conducted in the country (Lan & Khoi Thach, 2022;Mehmood, Mohd-Rashid, Ong, & Abbas, 2021); prior information about the company making the IPO (Chowdhry & Sherman, 1996;Hayat & Hassan, 2017), level of market efficiency (Avci, 2021;Karnatak, Malik, & Udayan Karnatak, 2021;Mehmood et al, 2021); role of the regulator (Arora & Singh, 2020;Dong et al, 2021); market capitalization (Arora & Singh, 2020;Lan & Khoi Thach, 2022); economic performance of the country (Arora & Singh, 2020;Mehmood et al, 2021); monetary policies of the country (Adra, 2021;Arora & Singh, 2020;Tekatli, 2021); investor perception about the IPO and the market (Gupta et al, 2022;Lan & Khoi Thach, 2022;Mehmood et al, 2021) and performance of previous IPOs of the company, its peers and other companies amongst the others (Agarwal, Liu, & Rhee, 2008;Badru & Ahmad-Zaluki, 2018;Lan & Khoi Thach, 2022;Tajuddin, Mohd-Rashid,...…”