scholarly journals Short-run price performance of IPOs and corporate governance practices: Evidence from a frontier market

2018 ◽  
Vol 2 (1) ◽  
pp. 34-42 ◽  
Author(s):  
SMRK Samarakoon ◽  
KLW Perera
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Negative Impact ◽  
Stock Exchange ◽  
Sri Lankan ◽  
Governance System ◽  
Public Offerings ◽  
Price Performance ◽  
Governance Practices ◽  
Short Run

The short-run price performance of Initial Public Offerings (IPOs) indicates that the prices are often underpriced which is widely documented as a universal phenomenon. Corporate governance refers to the set of systems, principles and processes by which a company is governed. Establishing good corporate governance system in an IPO company makes good decisions which attract more outside investors. Therefore, this study examines whether there is any impact of corporate governance practices on short-run price performance of Sri Lankan IPOs. Study examined 44 fixed price IPOs which were listed on the Colombo Stock Exchange (CSE) during the period of 2003 – January to 2015- December. The study found that Sri Lankan IPOs underprice by 30% on AR, which is statistically significant at 5% level. Further, it found that block holder ownership (ownership concentration), CEO duality and existence of the non-executive directors in the board are positively related to the short-run underpricing, which are statistically significant at 5%. But, the board size has a significant negative impact on underpricing. These relationships are in line with the international literature which confirms that the corporate governance practices have significant impact on short-run price performance of IPOs in Sri Lanka. These findings also support the agency and signaling theories.

scholarly journals Review of short-run performance of initial public offerings in Australia

2021 ◽  
Vol 18 (2) ◽  
pp. 188-200
Author(s):  
Lutfa Tilat Ferdous ◽  
Niroshani Parahara Withanalage ◽  
Abyan Amirah Qamaruz Zaman
Keyword(s):  
Regression Analysis ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Secondary Market ◽  
Publicly Traded ◽  
Ipo Underpricing ◽  
Secondary Markets ◽  
Public Offerings ◽  
Short Run ◽  
Total Market

This study investigates the short-run performance of initial public offerings in Australia. Based on sources from the Morningstar DatAnalysis database, we analyzed 211 Australian publicly traded initial public offerings (IPO) listed on the Australian stock exchange between January 2011 and December 2015 using multiple regression analysis with dummies to represent industry and listing year. According to our analysis, total market return indicates an IPO underpricing phenomenon whereas secondary market shows an overpricing scenario. Moreover, this analysis supports the contention that short-run performance fluctuations were based on the listing year and industry settings. This study contributes to the literature by analysing the short-run performance of both the primary and secondary markets

scholarly journals The two-tier board system and underpricing of initial public offerings: Evidence from Austria

2014 ◽  
Vol 12 (1) ◽  
pp. 352-362
Author(s):  
Lalith P. Samarakoon ◽  
Palani-Rajan Kadapakkam
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Supervisory Board ◽  
Board Structure ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Management Board ◽  
Board System

We study the relation between initial IPO underpricing and two-tier board structure in the Vienna Stock Exchange of Austria, where a two-tier board is mandatory for listed companies. The board ratio, defined as the size of the supervisory board to the management board, is used to capture the effect of two-tiered board on underpricing. The results show that the board ratio is negatively related with underpricing, consistent with the agency theory which predicts that more effective monitoring implied in a relatively larger supervisory board will lead to lower agency costs, and thus lower underpricing. The results are robust to the inclusion of control variables and suggest that firms seeking to raise external capital will be helped by adopting strong corporate governance standards.

scholarly journals Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

2020 ◽  
Vol 15 (1) ◽  
pp. 15
Author(s):  
Randy Kuswanto
Keyword(s):  
Initial Public Offerings ◽  
Negative Impact ◽  
Stock Exchange ◽  
Investment Decision ◽  
Ordinary Least Squares ◽  
Risk Information ◽  
Risk Disclosure ◽  
Public Offerings ◽  
Qualitative And Quantitative ◽  
Investment Decision Making

The purpose of this study is to investigate how risk information disclosed in prospectus influences the initial returns of initial public offerings (IPOs) in Indonesia. This study collected 62 sample IPOs offered in the Indonesian Stock Exchange from 2017–2018. Ordinary least squares was performed to test the association between risk disclosure and initial returns. Results indicate that prospectus provides risk information associated with initial returns. Both qualitative and quantitative dimensions have a significant negative impact on the initial returns. It can be concluded that risk information has an important role in the underpricing phenomenon. The study has extended the available literature by investigating risk disclosure from a dual perspective. Moreover, qualitative and quantitative assessments both have a direct impact on the initial returns and must be considered in investment decision making. Keywords: Risk, IPO, underpricing, initial returns

scholarly journals Earnings management, corporate governance, and ownership structure of Philippine initial public offerings

2021 ◽  
Vol 18 (4) ◽  
pp. 175-191
Author(s):  
Angelo O. Burdeos
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Initial Public Offerings ◽  
Ownership Structure ◽  
Stock Exchange ◽  
The Philippines ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Ceo Duality ◽  
Public Offerings

Prior studies examined the effect of corporate governance variables on discretionary current accrual, the most widely used measurement of earnings management. The principal-agent conflict implies that the size of the board, the percent of independent directors, CEO duality, and auditor prestige limit discretionary current accruals (DCA). This paper extends past studies by examining the effect of ownership structure on discretionary current accruals. The study determines the level of income-increasing earnings management of initial public offerings (IPOs) in the Philippines and the factors that explain it. Particularly, the paper examines the effect of ownership concentration and largest shareholder ownership on discretionary current accruals. The study uses a final sample of 105 IPO firms in Philippine Stock Exchange (PSE) from 2008 to 2018. Employing the modified Jones’s (1991) model to measure discretionary current accrual and multiple regression analysis, the study finds -4.19% discretionary current accrual on the average. It also reveals that the 2002 Philippine Code of Corporate Governance (PCCG) is ineffective in curbing earnings management. In addition, there is an insignificant relationship between the size of the board, CEO duality, ownership concentration, largest shareholder ownership and auditor prestige, and earnings management. Furthermore, the paper finds a significant relationship between the percent of independent directors, industry sector, return on assets (ROA) and cash flow from operations and earnings management.

scholarly journals PERAN CORPORATE GOVERNANCE DALAM MENURUNKAN KEBANGKRUTAN PADA PERUSAHAAN DI INDONESIA

2017 ◽  
Vol 21 (3) ◽  
pp. 391
Author(s):  
Tasya Hilaliya ◽  
Farah Margaretha
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Distress ◽  
Manufacturing Industry ◽  
Negative Impact ◽  
Stock Exchange ◽  
Z Score ◽  
Panel Data Regression ◽  
Data Regression ◽  
Governance Practices

This research examines the influence of Corporate Governance on Firm Performance measured by Tobin's Q and Financial Distress measured by Z-score. The samples used were 72 companies engaged in the manufacturing industry are listed on the Indonesia Stock Exchange (BEI) for five years from 2011 to 2015. The analytical methods used in this research is panel data regression, discriminant analysis, and logistic regression. The results showed that (I) there is no significant impact between corporate governance practices on firm performance. (2) there is negative impact between corporate governance practices on financial distress. Then, the companies need to increase corporate governance in order to avoid possibility of financial distress and for the investor before making an investment should consider the factors that affect the firm performance and financial distress

Moderating effect of investor demand: privatized IPOs and flipping activity in the Pakistan IPO market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ayesha Anwar ◽  
Rasidah Mohd-Rashid
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
High Volume ◽  
Least Square ◽  
Valuable Insight ◽  
Trading Behavior ◽  
Content Type ◽  
Public Offerings ◽  
Price Performance ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of privatized initial public offerings (IPOs) on flipping activity in the Pakistan IPO market. Design/methodology/approach This study sampled 95 IPOs listed on the Pakistan stock exchange over the period of 2000 to 2019. The ordinary least square technique and quantile regression were used to examine the impact of privatized IPO on flipping activity. Findings The present study finds that privatization affects flipping activity and creates a quality signal in Pakistan’s IPO market. The findings of this study also show that privatized IPOs were subjected to high levels of flipping activity compared to non-privatized IPOs. Additionally, investors’ demand has been found to moderate the relationship between privatized IPOs and flipping activity in Pakistan’s IPO market. Research limitations/implications Based on the fact that the sample consists of a combination of privatized and non-privatized IPOs, the results provide valuable insight into factors that may lead to unusual trading behavior/flipping during the first day of listing. Originality/value Despite several studies on events (e.g. short- and long-term price performance) around IPO, there is little evidence on how privatized IPOs affect flipping activity, which is a high volume of trading immediately after listing.

Value Relevance (VR), Earnings Management and Corporate Governance System

2016 ◽  
Vol 6 (2) ◽  
pp. 317
Author(s):  
Reza Dowlatabadi ◽  
Mahdi Filsaraei
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Stock Price ◽  
Negative Impact ◽  
Value Relevance ◽  
Stock Exchange ◽  
Information Source ◽  
Governance System ◽  
Financial Report ◽  
Corporate Governance System

Today, to make investment decisions, investors analyze the stock in the stock market and an information source used by them isthe financial report of the related firms. In some cases, the report may be prepared in accordance with management policies, which is known as an earnings management.Earnings management will affect intelligence value and consequently have negative impact. Due to these issues, in this study, the relationship between VRof earnings, earnings management and corporate governance is discussed. Using a sample of listed companies in Tehran Stock Exchange and the regression model, the results showed that the ownership of institutional investors has reduced the earnings management, but compared to major shareholders and company's audit by the National Audit Office, it has increased earnings management.The results also show that there is no significant relationship between management and the stock price as an indicator of measuring the VR of earnings.

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