The directs costs of A-REIT IPOs

2015 ◽  
Vol 33 (2) ◽  
pp. 196-204 ◽  
Author(s):  
Bill Dimovski
Keyword(s):  
Initial Public Offerings ◽  
Global Financial Crisis ◽  
Direct Costs ◽  
Real Estate Investment Trust ◽  
Content Type ◽  
Public Offerings ◽  
Factors Influencing ◽  
Using Data ◽  
The Cost ◽  
Practical Implications

Purpose – Direct costs of Australian Real Estate Investment Trust (A-REIT) initial public offerings (IPOs) were last reported in the literature using data to 2004. Much has occurred since then. The purpose of this paper is to introduce and include the A-REIT IPOs over the last ten years and examine the cost and the factors influencing the percentage underwriting and percentage total direct costs by A-REITs IPOs. The study also investigates specifically whether the utilization of an underwriter (who guarantees the success of the capital raising) rather than a stockbroker (who does not guarantee such success) costs significantly more. Design/methodology/approach – The study examines 87 A-REIT IPOs from January 1994 until December 2013. An OLS regression is performed to identify significant influencing factors on percentage underwriting costs and percentage total direct capital raising costs. Findings – The study finds that larger capital raisings and those with large investor or institutional involvement identified in the prospectus are significant in reducing underwriting costs. The study does not find that underwritten IPOs are significantly more expensive (or cheaper) than those not underwritten. Additionally, the size of the issue, whether the firm offers stapled securities (is internally managed) and has higher net asset to issue price characteristics reduces the total cost of underwritten IPOs. Practical implications – The paper provides information to new A-REIT issuers, underwriters and advisors broadly on new issue costs and on factors influencing the IPO issue costs. Originality/value – The study is the first to examine the costs of A-REIT IPO capital raising data in the years prior to and following the recent global financial crisis period.

Exploring intellectual capital disclosure as a mediator for the relationship between IPO firm-specific characteristics and underpricing

2015 ◽  
Vol 16 (3) ◽  
pp. 639-660 ◽  
Author(s):  
Shaw Warn Too ◽  
Wan Fadzilah Wan Yusoff
Keyword(s):  
Initial Public Offerings ◽  
Intellectual Capital ◽  
Design Methodology ◽  
Firm Characteristics ◽  
Content Type ◽  
Public Offerings ◽  
Intangible Resources ◽  
The Cost ◽  
The Relationship ◽  
Practical Implications

Purpose – The purpose of this paper is to examine the direct and indirect impact of firm-specific characteristics on the level of underpricing among Malaysian initial public offerings (IPOs). Design/methodology/approach – Content analysis of IPO prospectuses was used for 331 firms underwent listing between 2002 and 2008. The extent of disclosure was computed by applying the disclosure index of Bukh et al. (2005). Findings – Of the five firm characteristics examined, there is a direct relationship between the firm’s financial performance and the level of foreign activity, and the level of underpricing, instead of being mediated through disclosure. However, some firm characteristics have direct influence on the extent of disclosure but do not have any influence on underpricing. Research limitations/implications – This empirical study concentrates on the Malaysian IPOs on a single disclosure mechanism. Other disclosure items can be examined together with the intellectual capital disclosure items. Practical implications – As the findings reveal that the extent of disclosure is relatively low in influencing the level of underpricing. Had the disclosure been higher, it may have some influence on underpricing. The accounting governance board need to regulate the disclosures of the intangible resources so that the level of underpricing can be minimized. Originality/value – This study provides new insight for the examination of direct and indirect (through disclosure) association between firm-specific characteristics and underpricing. The findings shed some lights to the IPO issuers to enhance disclosure so that the cost of capital can be reduced.

The 2008–2009 global financial crisis and the cost of debt capital among SMEs: Swedish evidence

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Dynamic Panel Data ◽  
Cost Of Debt ◽  
Cross Sectional ◽  
Content Type ◽  
Debt Capital ◽  
Using Data ◽  
The Cost

PurposeThe main purpose of this study is to describe and analyse the relationship between the 2008–2009 global financial crisis and small and medium-sized enterprises' cost of debt capital.Design/methodology/approachStatistical methods, including multiple OLS and dynamic panel data, were used to analyse a longitudinal cross-sectional panel dataset of 3865 Swedish SMEs operating in five industry sectors over the 2008–2015 period.FindingsThe results suggest that the cost of debt was influenced by the financial crisis and another macroeconomic factor, i.e. the interbank interest rate, and by firm-specific factors such as firm size and lagged cost of debt.Originality/valueTo the authors' best knowledge, this is one of few studies to examine the cost of debt among SMEs during the crisis and post-crisis periods using data from a large-scale, longitudinal, cross-sectional database.

Regulatory non-compliance and performance of deposit money banks in Nigeria

2018 ◽  
Vol 26 (3) ◽  
pp. 425-441 ◽  
Author(s):  
Ismaila Yusuf ◽  
Damola Ekundayo
Keyword(s):  
Emerging Economy ◽  
Bottom Line ◽  
Content Type ◽  
Correlational Research ◽  
And Performance ◽  
Using Data ◽  
The Cost ◽  
The Impact ◽  
Nigerian Banking ◽  
Practical Implications

Purpose The purpose of this study is to examine regulatory sanctions from an emerging economy perspective and analyzing the impact of regulators imposed monetary sanctions on banks’ performance. Design/methodology/approach The study adopted correlational research design to examine the effect of regulatory penalties on the performance of deposit money banks in Nigeria. This study used panel data from a sample of 15 deposit money banks in Nigeria for the period of 2006-2015. Multiple regression analysis was carried out. Findings Results showed that penalties imposed by regulators in the Nigerian banking industry have no significant impact on the bottom line of the defaulters. Penalties imposed on foreign exchange and international trade related infraction showed that the cost of penalties is below the benefits enjoyed from such infractions. Practical implications The insignificant impact of penalties on performance implies that deposit money banks have considered penalties imposed by regulators as operational expenses and transferred such to customers. Originality/value The study differs from other studies that examined regulatory penalties on performance by focusing on financial performance and using data from an emerging economy perceived to have weak regulatory environment.

scholarly journals Another piece of the puzzle: REIT IPO underpricing after the financial crisis

2017 ◽  
Vol 35 (3) ◽  
pp. 264-276 ◽  
Author(s):  
Bill Dimovski ◽  
Christopher Ratcliffe ◽  
Monica Keneley
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Global Financial Crisis ◽  
Ipo Underpricing ◽  
Content Type ◽  
Public Offerings ◽  
Industrial Companies ◽  
Retail Investors ◽  
The Global Financial Crisis ◽  
Academic Debate

Purpose The purpose of this paper is to investigate the underpricing of real estate investment trust (REIT) initial public offerings (IPOs) from January 2010 to June 2015, as the sector recovered from the global financial crisis. Design/methodology/approach This study analyses the first day returns of US REIT IPOs in the post financial crisis period. The study then employs regression analysis to examine the factors that influence IPO underpricing. Findings The study observes that underpricing, on average, is not significantly different to zero. Furthermore, the REIT IPOs examined display underperformance in the longer term. In contrast to the earlier data samples of Chen and Lu (2006), the authors do not find that underwriting costs are a direct substitute for the indirect cost of underpricing, instead the authors find that higher underwriting costs are associated with higher underpricing. Also in contrast to the mainstream underpricing literature, the data suggest larger capital raisings require higher underpricing. The authors also find that newly listed REITs provided significant excess dividend returns over the post-listing period. Practical implications For institutional and retail investors, the results will help to further inform investment opportunities in REIT IPOs. Originality/value This paper adds to the ongoing academic debate of the lack of underpricing in REIT IPOs relative to industrial companies. Research has shown periods of underpricing are often replaced with periods of overpricing suggesting that the pattern of behavior in REIT markets is substantially different.

Underwriter reputation and IPO valuation in an emerging market: evidence from Malaysia

2020 ◽  
Vol 46 (10) ◽  
pp. 1283-1304 ◽  
Author(s):  
Chui Zi Ong ◽  
Rasidah Mohd-Rashid ◽  
Kamarun Nisham Taufil-Mohd
Keyword(s):  
Initial Public Offerings ◽  
Intrinsic Value ◽  
Emerging Market ◽  
Cross Sectional ◽  
Content Type ◽  
Public Offerings ◽  
Underwriter Reputation ◽  
The Cost ◽  
The Relationship

PurposeThe purpose of this study is to examine the influence of underwriter reputation on the valuation of Malaysian initial public offerings (IPOs).Design/methodology/approachThis study employed cross-sectional multiple regression models to analyse the relationship between underwriter reputation and IPO valuation that included 466 IPOs listed on Bursa Malaysia from 2000 to 2017.FindingsThe results revealed that underwriter reputation had a significant negative association with IPO valuation. Firms that engaged the services of reputable underwriters had their IPO offer prices set lower than the intrinsic values during the listing. After incorporating firms' size, this study found a positive relationship between underwriter reputation and IPO valuation. Big firms (high quality) hired reputable underwriters for certification purposes as issuers were aware that the cost of hiring a reputable underwriter would be justified by increased transparency after listing. Therefore, firms that engaged reputable underwriters had approximately fair values since issuers assumed that the price would be close to the intrinsic value following enhanced transparency post-listing.Research limitations/implicationsFuture studies should focus on other non-financial factors, such as auditor reputation.Originality/valueThe present study provides new insights into the certification role of underwriters in valuing IPOs in the Malaysian market.

scholarly journals Reducing asymmetric information in venture capital backed IPOs

2016 ◽  
Vol 42 (6) ◽  
pp. 553-568 ◽  
Author(s):  
Diego Escobari ◽  
Alejandro Serrano
Keyword(s):  
Asymmetric Information ◽  
Venture Capital ◽  
Initial Public Offerings ◽  
Capital Expenditures ◽  
Group Affiliation ◽  
Specific Group ◽  
Content Type ◽  
Public Offerings ◽  
Tangible Assets ◽  
Practical Implications

Purpose – The purpose of this paper is to model asymmetric information and study the profitability of venture capital (VC) backed initial public offerings (IPOs). The mixtures approach endogenously separates IPOs into differentiated groups based on their returns’ determinants. The authors also analyze the factors that affect the probability that IPOs belong to a specific group. Design/methodology/approach – The authors propose a new method to model asymmetric information between investors and firms in VC backed IPOs. The approach allows the authors to identify differentiated companies under incomplete information. The authors use a sample of 2,404 US firms from 1980 through 2012 to estimate the mixture model via maximum likelihood. Findings – The authors find strong evidence that companies can be separated into two groups based on how IPO returns are determined. For companies in the first group the results are similar to previous studies. For companies in the second group the authors find that profitability is mainly affected by the reputation of the seed VC and capital expenditures. Tangible assets and age help explain group affiliation. The authors also motivate the findings for a continuum of heterogeneous IPO groups. Practical implications – The proposed mixture approach helps decrease asymmetric information for investors, regulators, and companies. Originality/value – The mixture methods help decrease asymmetric information between investors and firms improving the probability of making profitable investments. Separating between groups of IPOs is crucial because different determinants of an IPO operating performance can potentially have opposite effects for different groups.

Corporate social performance and cost of debt: the relationship

2017 ◽  
Vol 13 (2) ◽  
pp. 250-265 ◽  
Author(s):  
Barbara Sveva Magnanelli ◽  
Maria Federica Izzo
Keyword(s):  
Global Financial Crisis ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Risk Profile ◽  
Cost Of Debt ◽  
Data Set ◽  
Content Type ◽  
Corporate Social ◽  
The Cost ◽  
Practical Implications

Purpose This paper aims to investigate the link between corporate social performance (CSP) and cost of debt financing. Despite academic debate has focused on the link between corporate social responsibility (CSR) and CSP (expressed through accounting and market measures of profitability), few empirical researches have analysed the relations between CSR, cost of debt and its relation with the risk profile of a firm. The literature on the cost of debt determinants generally documents a negative association between measures of the risk of the firm and its cost of debt. The literature on CSR defines risk reduction as one of the potential benefits related to CSR activities. Thus, the expectation is that high CSP scores are inversely related to cost of debt. Design/methodology/approach Using a unique data set of 332 firms over a time period of five years antecedent to the global financial crisis, a linear regression model is applied. Findings The results show a positive relation between CSP and cost of debt, demonstrating that CSR is not a value driver with an impact on the firm’s risk profile. Practical implications The research has also practical implications as it makes managers aware of the potentiality of CSP to reduce the firm’s cost of debt. Originality/value These findings enlarge the empirical research on the value of CSP, expanding it towards a quite new area of investigation: the cost of external financing.

scholarly journals Shariah-compliant status and IPO oversubscriptions

2018 ◽  
Vol 9 (4) ◽  
pp. 531-548 ◽  
Author(s):  
Ahmad Hakimi Tajuddin ◽  
Nur Adiana Hiau Abdullah ◽  
Kamarun Nisham Taufil Mohd
Keyword(s):  
Initial Public Offerings ◽  
Design Methodology ◽  
Content Type ◽  
Financial Ratio ◽  
Future Studies ◽  
Public Offerings ◽  
Quantile Regression Model ◽  
Early Performance ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to examine the impact of Shariah-compliant status on oversubscription of initial public offerings (IPOs) in Malaysia. It is believed that the Shariah-compliant status serves as a platform that sends a credible signal to investors which could possibly explain the IPO oversubscription anomaly. Design/methodology/approach This study used a multivariate and quantile regression model which involved 252 IPOs listed on Bursa Malaysia from 2005 to 2015. Findings The results show a significant positive relationship between Shariah-compliant status and oversubscription ratio, which suggests that companies with Shariah status could draw the attention of the investors. Strict guidelines and permissible elements of Shariah-compliant are considered agreeable and amicable by the investors. Research limitations/implications Future studies should look into financial ratio benchmark (cash and debt) for determining Shariah-compliant status to enhance the understanding of oversubscription of IPOs in Malaysia. Practical implications This study offers practical understanding to the issuers and underwriters on the factors that should be considered in assuring a good early performance of their issuance. Therefore, it will benefit the issuers and underwriters in managing and planning the IPO process carefully. Social implications The results of this study provide a new insight for investors regarding important information found in the prospectus when making the decisions to subscribe to IPOs. Originality/value This paper is one of the first to provide an empirical evidence of the impact of Shariah-compliant status on oversubscription in the IPO market.

Fabrication of interview data

2018 ◽  
Vol 26 (2) ◽  
pp. 213-226 ◽  
Author(s):  
Jörg Blasius
Keyword(s):  
Survey Research ◽  
International Student ◽  
Student Assessment ◽  
Content Type ◽  
International Student Assessment ◽  
Pisa 2012 ◽  
Research Organizations ◽  
Using Data ◽  
Copy And Paste ◽  
Practical Implications

Purpose Evidence from past surveys suggests that some interviewees simplify their responses even in very well-organized and highly respected surveys. This paper aims to demonstrate that some interviewers, too, simplify their task by at least partly fabricating their data, and that, in some survey research institutes, employees simplify their task by fabricating entire interviews via copy and paste. Design/methodology/approach Using data from the principal questionnaires in the Programme for International Student Assessment (PISA) 2012 and the Programme for the International Assessment of Adult Competencies (PIAAC) data, the author applies statistical methods to search for fraudulent methods used by interviewers and employees at survey research organizations. Findings The author provides empirical evidence for potential fraud performed by interviewers and employees of survey research organizations in several countries that participated in PISA 2012 and PIAAC. Practical implications The proposed methods can be used as early as the initial phase of fieldwork to flag potentially problematic interviewer behavior such as copying responses. Originality/value The proposed methodology may help to improve data quality in survey research by detecting fabricated data.

Policing in the COVID-19 pandemic: are rural police organizations immune?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thomas J. Mrozla
Keyword(s):  
Design Methodology ◽  
The United States ◽  
Content Type ◽  
Public Health Emergencies ◽  
Police Organizations ◽  
Police Agencies ◽  
Health Tracking ◽  
Rural Police ◽  
Using Data ◽  
Practical Implications

PurposeThis study examined how rural police agencies have responded to the COVID-19 pandemic.Design/methodology/approachUsing data from various sources, this study first analyzed what factors influenced agency preparedness to respond to pandemics. Second, it examined how the pandemic influenced specific organizational practices.FindingsFindings revealed that as coronavirus infections increased in counties, supervisors were more likely be tasked with inspecting personal protective equipment (PPE), agencies were more likely to offer pandemic related training, health tracking of officers was more likely to occur and agencies were more likely to encounter a shortage of officers. In addition, as rurality increased, agencies were more likely to offer training but less likely to experience officers contracting COVID-19 and an officer shortage. Lastly, as the rurality of the county in which the agency resides increased, the ability to supply PPE decreased.Practical implicationsBased on these findings, it is imperative that rural police agencies give attention to risk management and the formulation of policy to prepare for public health emergencies.Originality/valueWhile knowledge about how large police agencies in the United States have responded during the coronavirus pandemic is building, little is known about rural policing during pandemics.

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