scholarly journals Corporate governance and IPO underpricing: evidence from the italian market

2021 ◽  
Author(s):  
Emanuele Teti ◽  
Ilaria Montefusco
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Boards Of Directors ◽  
Stock Option ◽  
Board Members ◽  
Ipo Underpricing ◽  
Italian Market ◽  
Public Offering ◽  
The Impact ◽  
Positive Effect

AbstractThis paper aims to analyse the impact of firms’ corporate governance characteristics on the degree of first-day returns (i.e., underpricing) in the Italian initial public offering (IPO) market. In particular, this work investigates the impacts of the characteristics of boards of directors (BoDs) and ownership structure on the underpricing of newly offered shares. By studying a sample of 128 Italian IPOs between 2000 and 2016, it is concluded that corporate governance characteristics affect the degree of first-day returns following a company’s IPO. More specifically, the size of the BoD negatively affects underpricing, while the ownership of institutional investors and board members has a positive effect on the degree of underpricing. Conversely, no significant evidence is found with regard to board independence, the number of female directors in the boardroom, the implementation of stock option plans and ownership concentration.

scholarly journals Struktur Corporate Governance, Reputasi Underwriter Dan Initial Public Offering (Ipo) Underpricing Di Indonesia

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Purwanto Purwanto ◽  
Bambang Nur Cahyaningrum
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Cross Sectional Study ◽  
Sectional Study ◽  
Ipo Underpricing ◽  
Cross Sectional ◽  
Purposive Sampling ◽  
Public Offering

Penelitian ini bertujuan untuk mengkaji apakah struktur corporate governance perusahaan dan reputasi underwriter mempengaruhi IPO underpricing perusahaan yang go public dengan menggunakan periode tahun 2010-2016. Penelitian ini menitikberatkan pada pengaruh reputasi underwriter dan struktur corporate governance yaitu komposisi dewan komisaris independen, komite audit dan dewan direksi. Penelitian ini merupakan penelitian ekspost facto dengan menggunakan dimensi waktu cross sectional study. Populasi yang digunakan dalam penelitian ini adalah seluruh perusahaan yang melakukan Initial Public Offering (IPO) di Bursa Efek Indonesia (BEI) selama periode 2010-2016. Jumlah sampel dalam penelitian ini adalah 117 perusahaan. Teknik pengambilan sampel yang digunakan adalah purposive sampling. Hasil penelitian ini menunjukkan bahwa reputasi underwriter dan dewan direksi berpengaruh signifikan terhadap IPO Underpricing di Indonesia.

Performance of Indian IPOs: An Empirical Analysis

2017 ◽  
Vol 18 (3) ◽  
pp. 734-749 ◽  
Author(s):  
Rekha Handa ◽  
Balwinder Singh
Keyword(s):  
Corporate Governance ◽  
Empirical Analysis ◽  
Initial Public Offering ◽  
Investment Decision ◽  
Ipo Underpricing ◽  
Board Committees ◽  
Effective Signal ◽  
Public Offering ◽  
Major Consideration ◽  
Ownership Patterns

The present research study contributes to the extant literature on underpricing rather uniquely by addressing the under-researched linkage of corporate governance to underpricing. The originality of this effort also lies in being one of the initial efforts of exploring governance in context of initial public offering (IPO) underpricing in Indian settings. The study comprises an empirical analysis of 404 Indian IPOs studied for their board structures and ownership attributes using IPO prospectuses. Drawing support from the signalling theory, the variables board size and board committees exhibit a significant positive relationship to the IPO returns on the listing day. In Indian markets characterized by concentrated family-owned firms, promoter ownership does work as an effective signal for investors who take cues of firm potential from ownership patterns. Corporate governance measures have a miniscule contribution in explaining the underpricing of Indian IPOs and indicating that investors do not incorporate these as a major consideration in their investment decision.

The Impact of Global Financial Crisis on IPO Underpricing in Malaysian Stock Market

2018 ◽  
Vol 21 (04) ◽  
pp. 1850023 ◽  
Author(s):  
Hon-Wei Leow ◽  
Wee-Yeap Lau
Keyword(s):  
Financial Crisis ◽  
Initial Public Offering ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Ipo Underpricing ◽  
Dummy Variable ◽  
The Global Financial Crisis ◽  
Public Offering ◽  
The Impact ◽  
The Relationship

This study examines the impact of the Global Financial Crisis (GFC) on Initial Public Offering (IPO) underpricing in the context of an emerging market from January 2006 to December 2011. Models consist of hierarchical and dummy variable regressions have been evaluated. Our results show, firstly, by comparison between the pre-GFC, GFC and post-GFC periods, it can be observed that IPOs initial returns (offer-to-close) are generally lower due to the crisis. Secondly, IPO underpricing provides an average of 17–25% of initial returns in the pre-GFC period, 1–3% during GFC period, and 3–7% in the post-GFC period. Thirdly, the financial crisis does not act as a moderator that worsens the relationship between underpricing of IPO and oversubscription ratio. Lastly, this study dispels the notion that investors should totally shun IPO during crisis period as there are still positive initial returns among the new issues. To the authors’ knowledge, this is the first study on the impact of the GFC on IPO underpricing in Malaysia.

The Effects of IPO Mandatory Lockups and Corporate Governance on Underpricing: Evidence From the Australian Securities Exchange

2019 ◽  
Vol 35 (4) ◽  
pp. 854-869
Author(s):  
Janto Haman ◽  
Keryn Chalmers ◽  
Victor Fang
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Equity Capital ◽  
Ipo Underpricing ◽  
Good Corporate Governance ◽  
Incremental Effect ◽  
Financial Strength ◽  
Equity Ownership ◽  
And Performance ◽  
Public Offering

In Australia, initial public offering (IPO) firms not satisfying profit or asset tests are permitted to list on the securities exchange with mandatory lockups (MLs) imposed on insiders’ shares. We investigate whether such lockups, and the lockup periods, are associated with underpricing. We find that the incremental effect of the association between longer ML periods and higher underpricing is stronger for firms with higher insiders’ equity ownership subject to MLs relative to firms with lower insiders’ equity ownership subject to MLs. This suggests that the extent and length of insiders’ equity ownership subject to MLs convey information regarding IPO firms’ risk. We also find that good corporate governance reduces IPO underpricing for firms with MLs. It moderates the IPO underpricing for firms with higher and longer insiders’ equity ownership subject to MLs. Our findings are informative for regulators in understanding how MLs can assist in allowing smaller and younger firms with inadequate financial strength and performance to publicly raise equity capital, while morally protecting investors and preserving market integrity.

scholarly journals Does Manager Ability Influence Prospectus Earnings Quality and IPO Underpricing?

2018 ◽  
Vol 8 (1) ◽  
pp. 1
Author(s):  
Stephanie A. Hairston ◽  
Ji Yu ◽  
Zenghui Liu
Keyword(s):  
Initial Public Offering ◽  
Financial Reporting ◽  
Earnings Quality ◽  
Reporting Quality ◽  
Preliminary Evidence ◽  
High Ability ◽  
Ipo Underpricing ◽  
Positive Effects ◽  
Public Offering ◽  
The Impact

Prior literature suggests that manager ability influences several factors, including financial reporting quality, key to the bargaining power of an issuing firm during their initial public offering (IPO). However, we also know that high ability managers are better able to engage in and conceal opportunistic behavior which may dampen any positive effects their abilities have in the IPO process. Given the conflicting affect that managerial ability may have on financial reporting and firm performance in the IPO setting, we examine the impact of manager ability on prospectus earnings quality and IPO underpricing. We find that IPO firms with high ability managers tend to have better earnings quality and are less underpriced than firms with low ability managers. We also find preliminary evidence that equity ownership strengthens the relationship between manager ability and IPO underpricing. Our findings are consistent with the streams of literature suggesting that better managers produce higher quality earnings and raise more capital during the IPO to invest in future growth opportunities if they are closely monitored. These findings should be useful to issuing firms considering hiring high caliber managers, investors in evaluating IPO firms, and researchers in examining the influence of human capital on IPO underpricing. 

Shariah-compliance and IPO underpricing: evidence from Pakistan Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Ahmad Hakimi Tajuddin ◽  
Hassan Mujtaba Nawaz Saleem
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Ipo Underpricing ◽  
Content Type ◽  
Initial Return ◽  
Asset Volatility ◽  
Financial Characteristics ◽  
Public Offering ◽  
The Impact

Purpose This study aims to investigate the effect of Shariah-compliant status and Shariah regulation on initial public offering (IPO) underpricing in Pakistan. Design/methodology/approach Besides the ordinary least square’s method, this study used quantile least squares as a robust approach and stepwise regression for further analysis to investigate the underpricing phenomenon in Pakistan. Data of 84 IPOs listed on Pakistan Stock Exchange from January 2000 to December 2018 were collected to determine the impact of Shariah-compliant status and Shariah regulation on IPO underpricing. Findings Results of the study show that Shariah-compliant status has a negative relationship but Shariah regulation has a positive relationship with IPO underpricing. Hence, it is contended that Shariah-compliant firms have lower asset volatility and uncertainty than non-Shariah-compliant firms because of less information asymmetry, resulting in lower underpricing. These Shariah-compliant firms provide signals of high-quality IPOs as they must comply with the strict guidelines issued by the Securities Exchange Commission of Pakistan in addition to being considered as amicable by investors. Further, this study suggests that investors are more attracted to Shariah-compliant firms than non-Shariah-compliant ones. Research limitations/implications This study’s offers limited consideration of nonfinancial and financial characteristics that could influence the decision of investors to subscribe to IPOs. Besides, future studies could consider the screening benchmarks; for instance, debt and cash may explain the intensity of IPO initial return in Pakistan. Originality/value The present work empirically investigated the influence of Shariah-compliant status and Shariah regulation on IPO underpricing in Pakistan’s IPO market, which has been scarcely covered in the existing literature.

scholarly journals The impact of the january effect on the IPO underpricing in Poland

2013 ◽  
Vol 13 (1) ◽  
pp. 121-135
Author(s):  
Adrian Wołoszyn ◽  
Dariusz Zarzecki
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
January Effect ◽  
Ipo Underpricing ◽  
Asymmetry Of Information ◽  
Warsaw Stock Exchange ◽  
Using Data ◽  
Public Offering ◽  
And Control ◽  
The Impact

Abstract We examine the initial public offering (IPO) underpricing phenomenon in Poland using data from the Warsaw Stock Exchange (the main market). In the article we survey historical average IPO underpricing in Europe and outside Europe. We discuss the determinants of the IPO underpricing which is based on asymmetry of information, ownership and control, institutional explanations and behavioural explanations. We discuss the calendar effect and we examine the influence of the January effect on the IPO underpricing. On the Warsaw Stock Exchange in 2005-2011, the IPO underpricing was bigger for companies that debuted in January than for companies that debuted in other months. The empirical results are not statistically significant.

scholarly journals Effect of Corporate Governance on Sustainability Disclosures: Evidence from Turkey

2020 ◽  
Vol 4 (1) ◽  
pp. 93
Author(s):  
Şerife Önder ◽  
Renat Baimurzin
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Governance Structure ◽  
Global Reporting Initiative ◽  
Fiscal Year ◽  
Board Members ◽  
Positive Effects ◽  
Sustainability Disclosure ◽  
Sustainability Reports ◽  
The Impact

This study aims to examine the relationship between the corporate governance structure and sustainability disclosure in Turkish business. To measure the impact of the board of directors on sustainability disclosure, companies on the Istanbul Stock Exchange that prepared sustainability reports per the Global Reporting Initiative (GRI) were selected as the working sample. In this study, 68 fiscal year data sets of 17 businesses that published regular sustainability reports during 2013–2016 were used. All were audited by the GRI. During the analysis, it was observed that the presence of influential community board members and the profitability of the enterprises are factors that bear positive effects on sustainability disclosures. Board size, the presence of independent board members, and the existence of corporate social responsibility committees were negative factors that, in fact, reduced sustainability disclosures of the companies. To increase sustainability disclosures, this study suggests that boards of directors should consist of influential community leaders.

scholarly journals Research on Underpricing Concept of IPO (Initial Public Offering) in Indian Stock Market

2019 ◽  
Vol 8 (11S) ◽  
pp. 179-183
Keyword(s):  
Initial Public Offering ◽  
Comparative Method ◽  
Open Market ◽  
Ipo Underpricing ◽  
Private Company ◽  
Enterprise Information ◽  
Corporate Network ◽  
Public Offering ◽  
Indian Stock Market ◽  
The Impact

There are several ways of raising funds from primary market but, IPOs are the widely adopted tool by the companies to raise funds from open market for the initial sale of stock by private company. India being a developing nation and flourishing corporate network is focused on IPO. The motivation behind this examination is to understand the case of underpricing exists to think about whether or not an Indian IPO and the impact of the administrative system on IPO underpricing. In this examination enterprise information is broken down by descriptive and comparative method. Indian market has more underpricing than overpricing.

IPO Underpricing and Media Sentiments: Avenue Supermarts and Vaswani Industries

2020 ◽  
Vol 9 (2) ◽  
pp. 178-188
Author(s):  
Vikas Gupta ◽  
Shveta Singh ◽  
Surendra S. Yadav
Keyword(s):  
Initial Public Offering ◽  
Institutional Investors ◽  
Qualitative Data ◽  
Real Life ◽  
Sources Of Information ◽  
Ipo Underpricing ◽  
Media Reports ◽  
Public Offering ◽  
The Impact

This case tries to analyse the impact of media sentiments on Initial Public Offering (IPO) underpricing. To delve deeper into the concept, two firms (Avenue Supermarts and Vaswani Industries Limited) are considered in this case, and the significance of media sentiments on IPO underpricing is highlighted. Through these two real-life examples, the case could show that the manner in which media reports an IPO can significantly impact their first-day returns. 1 This highlights the emerging role of qualitative data apart from quantitative data in explaining the dilemma of IPO underpricing. This case will try to encourage the discussion in the class regarding the role of media in explaining the reasons for high over/under priced IPOs. This facilitates discussion on the emerging role of behaviour finance in decision-making. This case also provides new learning to students regarding dealing with qualitative data in finance and basics of sentiment analysis. Dilemma: How to match the expectation of the market for pricing of an IPO. Theory: Information asymmetry Type of the case: Decisional and applied Protagonist: Not needed Options Underwriters can price the IPO below the price institutional investors are ready to pay or above it. Discussions and Case Questions What is the role of institutional investors? What will happen if the locking period is waived for the institutional investors? What are the sources of information for retail investors? Describe the role of media in influencing the sentiment of small investors.

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