Trust and IPO underpricing

Li, Xiaorong; Wang, Steven Shuye; Wang, Xue

doi:10.1016/j.jcorpfin.2019.02.006

Cited by 106 publications

(51 citation statements)

References 73 publications

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“…Organizational innovation and creativity also depend on a positive relationship between employee trust and transformational leadership (Gong, Huang, & Farh, ; Gundersen, Hellesøy, & Raeder, ). In complex and stressful situations, a transformational leader creates a trusting environment (Li, Wang, & Wang, ), helps and supports followers (Howarth & Rafferty, ), and acts as a guide (Bass, Avolio, Jung, & Berson, ). This helps to develop a trusting relationship between leaders and followers, which ensures followers' support (Burns, ).…”

Section: Trust As a Mediatormentioning

confidence: 99%

“…Trust can also act as a mediator between transformational leadership and work engagement during organizational change. Trust in leadership improves an employee's level of work engagement during periods of change (Agarwal, ; Li et al, ). The relationship between trust in leadership and work engagement can be understood using psychological contract theory, which holds that bonding between a leader and their followers creates a psychological contract between them (Rousseau, ).…”

Section: Trust As a Mediatormentioning

confidence: 99%

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The impact of trust in leadership on organizational transformation

Islam¹,

Furuoka²,

Idris³

2020

Glob Bus Org Exc

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During periods of transformation or in other uncertain and volatile business environments, high levels of work engagement-the extent to which employees identify with their role in an organization-enable leaders to implement change more effectively. A study conducted in Bangladesh's banking sector explores the influence of transformational leadership on work engagement and examines the mediating effect of trust in that relationship. Taking place in a context of significant organizational change, the study shows that a transformational leadership approach enhances work engagement. It also shows that the influence that a transformational leader has on the level of work engagement is subject to the degree of trust that employees have in their leader. The findings highlight the need to foster bonds between leaders and their followers and to pay close attention to the most critical antecedents of trust in leadership.

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Section: Trust As a Mediatormentioning

confidence: 99%

Section: Trust As a Mediatormentioning

confidence: 99%

The impact of trust in leadership on organizational transformation

Islam¹,

Furuoka²,

Idris³

2020

Glob Bus Org Exc

View full text Add to dashboard Cite

show abstract

“…Huang et al (2019) use IPOs issued during 1999–2009 and find that financial market development plays a key role in reducing information asymmetry and IPO underpricing, especially for financially constrained firms. Li et al (2019) show that an informal institutional environment such as social trust negatively affects IPO underpricing and the negative effect is more (less) pronounced for small and growth firms and firms in the high‐tech industry (firms in regions with strong investor protection and a high level of education).…”

Section: Background Information About Ipo Regulations and Brief Litermentioning

confidence: 99%

Volatile market condition, institutional constraints, and IPO anomaly: evidence from the Chinese market

Liu

Zhang

et al. 2020

Accounting & Finance

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We provide a holistic view of factors affecting IPO underpricing and aftermarket trading of Chinese initial public offerings (IPOs) over 23 years. The subscription ratio and offer amount are among the top three most important determinants of underpricing when stock markets are less volatile. However, the recent IPOs’ initial return and institutional constraints on offer price and aftermarket trading price are the driving forces in volatile markets. The underpricing (the first‐day trading price limit) is the most important factor affecting IPO aftermarket trading when stock markets are less (more) volatile, suggesting how factors affect IPO underpricing and aftermarket trading depends on stock market conditions.

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“…When the underwriter trusts the IPO firm, they are more likely to accept a higher price offered by that firm (Y. Chen et al, 2015; X. Li et al, 2019).…”

Section: Family Firm Ipo Underpricing In Chinamentioning

confidence: 99%

Family Involvement, Governmental Connections, and IPO Underpricing of SMEs in China

Yang

Doty

2020

Family Business Review

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This study draws on institutional theory to explore the relationship between family involvement, governmental connections, and initial public offering (IPO) underpricing in China. We explore these relationships using a sample of 577 manufacturing firms listed on the small and medium enterprises board of the Shenzhen Stock Exchange over a 10-year period (2004-2014). In contrast with previous literature, we found that Chinese family firms tend to exhibit less IPO underpricing than nonfamily firms. In addition, we found family members’ political ties enhance the negative relationship between family involvement and IPO underpricing. In contrast, state ownership mitigates the above relationship.

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Trust and IPO underpricing

Cited by 106 publications

References 73 publications

The impact of trust in leadership on organizational transformation

The impact of trust in leadership on organizational transformation

Volatile market condition, institutional constraints, and IPO anomaly: evidence from the Chinese market

Family Involvement, Governmental Connections, and IPO Underpricing of SMEs in China

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