Underwriter Spread, Underwriter Reputation, and IPO Underpricing: A Simultaneous Equation Analysis

Purpose The purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability. Design/methodology/approach A simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation. Findings Unlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique. Practical implications Taking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms. Originality/value In addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.

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Managerial Ownership and Agency Conflicts: A Nonlinear Simultaneous Equation Analysis of Managerial Ownership, Risk Taking, Debt Policy, and Dividend Policy

Financial Review ◽

10.1111/j.1540-6288.1999.tb00448.x ◽

1999 ◽

Vol 34 (1) ◽

pp. 119-136 ◽

Cited By ~ 109

Author(s):

Carl R. Chen ◽

Thomas L. Steiner

Keyword(s):

Risk Taking ◽

Dividend Policy ◽

Simultaneous Equation ◽

Managerial Ownership ◽

Agency Conflicts ◽

Equation Analysis ◽

Debt Policy

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Two-stage least squares simultaneous equation analysis of the demand and supply of chicken meat

Respuestas ◽

10.22463/0122820x.1908 ◽

2021 ◽

Vol 26 (1) ◽

Author(s):

Giovanni Cancino Escalante ◽

Susan Cancino ◽

Daniel Francisco Cancino Ricketts

Keyword(s):

Least Squares ◽

Simultaneous Equation ◽

Chicken Meat ◽

Meat Production ◽

Two Stage ◽

Demand And Supply ◽

Financial Decisions ◽

Equation Analysis ◽

Short Run ◽

Two Stage Least Squares

Abstract Chicken meat production is one of the fastest growing industries in Colombia with an average per person consumption of 35.6 kg. Due to the increase in demand and to the growing importance of the chicken meat production to the Colombian economy the objective of the study was to estimate the demand and supply response and the short run elasticities for chicken meat using a two-stage least squares technique for simultaneous equations. Results indicated that chicken meat demand was responsive to changes in own and beef prices as well as income. The direction of the independent variables were as expected, with the exception of pork prices. The response of chicken meat supply to own-price changes was found to be inelastic in the short run. Chicken feed and the exchange rate elasticities did not present a great impact on the percentage changes of the quantity offered of chicken meat. The proposed model can be useful for producers, chicken meat companies managers and policymakers as understanding the factors that affect the chicken market can lead to optimal managerial and financial decisions

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Pengungkapan Intellectual Capital, Reputasi Underwriter dan IPO Underpricing

Jurnal Manajemen dan Bisnis Indonesia ◽

10.31843/jmbi.v1i2.25 ◽

2014 ◽

Vol 1 (2) ◽

pp. 313-327

Author(s):

Zulhawati Zulhawati

Keyword(s):

Intellectual Capital ◽

Stock Price ◽

Stock Exchange ◽

Statistical Test ◽

Financial Information ◽

Ipo Underpricing ◽

Price Increases ◽

Underwriter Reputation ◽

Observation Period ◽

Infor Mation

This study examines the effect of Intellectual Capital Disclosure and Underwriter Reputation to IPO Underpricing the company public on Indonesia Stock Exchange 2007-2012. The Results of research on the observation period there was 80% of companies experiencing IPO underpricing. Underpricing phenomenon is deliberately done to get the attention of the company's stock price increases in the first day listing or may occur due to information asymmetries between issuers and underwriters among and investors who have information about the issuer's prospects. Information asymmetry can be reduced by presenting financial information and non-financial information in the prospectus, one of non- financial information to be presented is intellectual capital. Information about the underwriter's reputation is also required by investors as a measure of financial information that is relevant and reliable. The results of multiple regression statistical test indicates that intellectual capital disclosure and underwriter reputation negatively affect the level of underpricing. This suggests that the higher intellectual capital disclosure can reduce IPO underpricing, as well as a good underwriter reputation can reduce IPO underpricing. Keywords: IPO underpricing, intellectual capital disclosure, underwriter reputation, infor-mation asymmetries

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