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 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.

scholarly journals Daftar Isi

2011 ◽  
Vol 1 (2) ◽  
Author(s):  
Admin Journal
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Initial Public Offering ◽  
Market Capitalization ◽  
Good Corporate Governance ◽  
Public Offering ◽  
Corporate Social

The Accountant Perceptions of The IFRS Convergence Plan In IndonesiaErsa Tri Wahyuni ... 85 Good Corporate Governance  dan Market Capitalization Dengan Variabel Moderating Corporate Social Responsibility Disclousure (Studi Kasus Pada Perusahaan Manufaktur Yang Terdaftar Di BEI)Kiswanto ... 97 Pengembangan Model Sistem Pengendalian Pada Aliansi Strategis Berbasis  SyariahSiti Zubaidah ...107Pengaruh Informasi Akuntansi Terhadap Kinerja Manajerial Dengan Tiga Variabel Moderating (Studi Empiris Pada BPR Di Kabupaten Bogor) Dona Primasari, Isbandriyati Mutmainah ... 115Peran Spiritualitas Keagamaan Bagi Akuntan Dalam Lingkungan Organisasi Agung Budi Sulistiyo ... 127Kajian atas Standar Pelaporan Keuangan Bank Perkreditan Rakyat: Komparasi Antara PSAK No. 31, SAK ETAP, dan Pedoman Akuntansi Bank Perkreditan Rakyat Ahmad Waluyo Jati, Eny Suprapti,Satria Budi Wicaksono ... 141Fenomena Manajemen Laba dalam IPO (Initial Public Offering); Studi dengan Menggunakan Model Aharony dan FriedlanLego Waspodo ... 151Analisis Kinerja Saham Syariah Dan Pengaruhnya Terhadap Respon Pasar Pada Perusahaan Yang Tercatat Di Jakarta Islamic Indeks Ratna Utami,Maha Putra Kusuma Nugraha ... 161

scholarly journals Apakah Corporate Governance ikut Mempengaruhi Tingkat Underpricing Perusahaan?

2021 ◽  
Vol 11 (2) ◽  
pp. 136
Author(s):  
ANDI AMRI ◽  
RAMADHI RAMADHI
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Institutional Ownership ◽  
Governance Structure ◽  
Ownership Concentration ◽  
Positive Signal ◽  
Corporate Governance Structure ◽  
Good Corporate Governance ◽  
Public Offering ◽  
A Company

Companies that have the potential will continue to improve by making innovations, being creative and innovating. So that it is expected to obtain qualified funding. This qualified funding will certainly be referred to by looking at the corporate governance structure and the level of underpricing for companies conducting Initial Public Offering (IPO). In achieving the company's goals, many theories put forward by experts. One of them is signaling theory. This theory explains that the existence of a good corporate governance structure, when a company conducts an IPO. This is a positive signal for investors to get involved in a company. Important points in corporate governance include the number of commissioners, dependent commissioners, ownership concentration and institutional ownership. The method used is comparative causal research using multiple regression analysis. Sample 62 observations in companies that have IPO from 2011 to 2016. The results show the number of members of the board of commissioners, the level of independence of the board of commissioners has a significant effect on underpricing. however, the concentration of ownership and institutional ownership has no significant effect on underpricing.

An Empirical Investigation of IPO Underpricing and the Change to the LLP Organization of Audit Firms

2004 ◽  
Vol 23 (1) ◽  
pp. 53-67 ◽  
Author(s):  
Steven R. Muzatko ◽  
Karla M. Johnstone ◽  
Brian W. Mayhew ◽  
Larry E. Rittenberg
Keyword(s):  
Initial Public Offering ◽  
Audit Quality ◽  
Limited Liability ◽  
Litigation Risk ◽  
Ipo Underpricing ◽  
Audit Firm ◽  
Legal Structure ◽  
Audit Firms ◽  
Public Offering

This paper examines the relationship between the 1994 change in audit firm legal structure from general partnerships to limited liability partnerships (LLPs) on underpricing in the initial public offering (IPO) market. The change in legal structure of audit firms reduces an audit firm's wealth at risk from litigation damages and reduces the incentives for intrafirm monitoring by partners within an audit firm. Prior research suggests that underpricing protects underwriters from litigation damages, and that the level of underpricing varies inversely with both the amount of implicit insurance provided by the audit firm and the quality of the audit services provided. We hypothesize the change in audit firm legal structure reduced the assets available from audit firms in IPO-related litigation and indirectly reduced audit quality by lowering intrafirm monitoring. As a result, underwriters have incentives as a joint and several defendant with the audit firms to increase IPO underpricing, particularly for high-litigation-risk IPOs, following audit firms' shifts to LLP status. Our findings are consistent with this hypothesis.

scholarly journals MENILAI TINGKAT KESEHATAN BANK DENGAN ANALISIS METODE RISK PROFILE, GOOD CORPORATE GOVERNANCE, EARNINGS, CAPITAL PADA BANK SYARIAH DI INDONESIA

2020 ◽  
Vol 6 (1) ◽  
pp. 139-160
Author(s):  
Hendra Galuh Febrianto ◽  
Amalia Indah Fitriana
Keyword(s):  
Corporate Governance ◽  
Optimal Level ◽  
Risk Profile ◽  
Business Strategies ◽  
Islamic Banking ◽  
Risk Profiles ◽  
Good Corporate Governance ◽  
And Performance ◽  
Financial Research ◽  
Bank Soundness

ABSTRACT In the banking world of soundness, banks are very important for the formation of trust. Trust and loyalty to banks is a very helpful factor and makes it easier for bank management to develop good business strategies. Bank Soundness Levels are results issued by banks which are carried out on bank risk and performance (Bank Indonesia Regulation Number: 13/1 / PBI / 2011). If more than conventional banking with Islamic banking, conventional banking finance is better than Islamic banking. This is blessed with poor sharia banking (corporate governance) management. In order to be able to carry out its functions properly, banks must have sufficient capital, ensure the quality of their assets properly, be well managed and managed based on the principle of prudence, generate sufficient profits to maintain an increase, and support liquidity so that it can be adjusted to their needs. Therefore banks are required to be able to achieve and maintain a good and optimal level of performance, because the level of bank performance can increase the level of trust and loyalty needed by the wider community to use the products, services and financial activities of the bank. The purpose of this study is for advanced financial research with analysis of Risk Profiles (Risk Profiles), Good Corporate Governance (GCG), Profitability (Income), and Capital (Capital) which is hereinafter abbreviated as RGEC with the final aim of research for the needs of Sharia banking management in accordance with the latest Bank Indonesia and OJK regulations. This type of research uses descriptive research proposed in the RGEC analysis (Risk Profile, Good Corporate Governance, Income, and Capital) at Islamic Banks in Indonesia. from 2013 to 2017. Keywords: Risk Profile, Good Corporate Governance, Income, Capital, Bank Soundness   ABSTRAK Dalam dunia perbankan tingkat kesehatan bank sangat penting bagi pembentukan kepercayaan. Kepercayaan dan loyalitas nasabah terhadap bank merupakan faktor yang sangat membantu dan mempermudah pihak manajemen bank untuk menyusun strategi bisnis yang baik. Tingkat Kesehatan Bank adalah hasil penilaian kondisi bank yang dilakukan terhadap risiko dan kinerja bank (Peraturan Bank Indonesia Nomor: 13/1/PBI/2011). Jika dibanding antara perbankan konvensional dengan perbankan syariah, kinerja keuangan perbankan konvensional lebih baik daripada perbankan syariah. Hal ini dikarena tatakelola (good corporate governance) perbankan syariah yang masih buruk. Agar dapat menjalankan fungsinya dengan baik, bank harus mempunyai modal yang cukup, menjaga kualitas asetnya dengan baik, dikelola dengan baik dan dioperasikan berdasarkan prinsip kehati-hatian, menghasilkan keuntungan yang cukup untuk mempertahankan kelangsungan usahanya, serta memelihara likuiditasnya sehingga dapat memenuhi kewajibannya. Oleh karena itu bank dituntut untuk bisa mencapai dan mempertahankan tingkat kinerja yang baik dan optimal, karena tingkat kinerja bank yang baik dapat meningkatkan kepercayaan dan loyalitas nasabah maupun masyarakat luas untuk menggunakan produk, jasa dan aktivitas keuangan dari bank tersebut. Tujuan penelitian ini adalah untuk menilai tingkat kesehatan keuangan dengan analisis Profil Risiko (Risk Profile), Good Corporate Governance (GCG), Rentabilitas (Earnings), dan Permodalan (Capital) yang selanjutnya disingkat RGEC dengan tujuan akhir merekomendasikan kebijakan untuk memperbaiki manajemen perbankan Syariah yang sesuai peraturan Bank Indonesia dan OJK yang terbaru. Jenis penelitian ini menggunakan penelitian deskriptif yang berfokus pada analisis RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital) pada Bank Syariah di Indonesia. dari tahun 2013 sampai 2017. Kata kunci: Risk Profile, Good Corporate Governance, Earnings, Capital, Tingkat Kesehatan Bank

scholarly journals An empirical study of IPO underpricing: Evidence from Chinese stock market

2014 ◽  
Vol 12 (1) ◽  
pp. 139-152 ◽  
Author(s):  
Tianxiang Xu ◽  
Yujie Zhao
Keyword(s):  
Empirical Study ◽  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Chinese Stock Market ◽  
Short Term ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Public Offering ◽  
Different Characteristics

Initial public offerings, as one of the most important activities for firms, have raising massive amount of researches. Regarding China, the stock markets are experiencing a massive level of IPO underpricing, which leads to trillions of dollars leaved on the table. This study is conducted for the question why Chinese IPO are so heavily underpriced and the determinants of IPO underpricing, also the possibility of IPO be underpriced in China. We confirm again that Chinese IPOs are heavily underpriced and the average underpricing level is about 110%. Further, Chinese IPO will experience a negative short term return starting from 10 days after listing, and there are significantly different characteristics for state owned IPOs and private IPOs. This study finds that information asymmetry, proportion of state owned share and risk are the mainly determinants of IPO underpricing in China. Additionally, one of the biggest reason that Chinese initial public offering is underpriced so much is because of government participation, since we find that firms with larger proportion of government state owned shares will be more underpriced.

scholarly journals IPO Underpricing After the 2008 Financial Crisis: A Study of the Chinese Stock Markets

2018 ◽  
Vol 10 (8) ◽  
pp. 2844 ◽  
Author(s):  
Rui Li ◽  
Wei Liu ◽  
Yong Liu ◽  
Sang-Bing Tsai
Keyword(s):  
Financial Crisis ◽  
Initial Public Offering ◽  
Small Firms ◽  
Effective Means ◽  
Ipo Underpricing ◽  
2008 Financial Crisis ◽  
Before And After ◽  
The Difference ◽  
The 2008 Financial Crisis ◽  
Public Offering

A firm’s capability of raising funding is closely related to its sustainable development. With a more efficient allocation of funding among the whole society, social resources will be better utilized. Initial Public Offering (IPO) can indeed be an effective means of raising capital for corporate ventures. Using 1069 firms which completed IPOs on Chinese stock exchanges between 1st January 2004 and 1st January 2013, we investigate the difference in IPO underpricing before and after the 2008 financial crisis. Based on OLS regression models, we find that the IPOs are less underpriced in the post-crisis period. We examine the moderating effects of firm size on the difference in IPO underpricing between pre- and post-crisis periods, finding that small firms experienced less IPO underpricing than large firms after the financial crisis. After applying different model specifications such as Robust and OProbit regressions, the results remain consistent. Our study contributes to understanding the dynamics and influences of the financial crisis on firms’ IPO cost from the perspective of information asymmetry.

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