This study objective compares the underwriter reputation, measured by a different method, in explaining Initial Public Offering (IPO) performance. The reputation is measured based on underwriter IPO frequency and deal value. The underwriter's reputation is then ranked and categorized into quartiles. We use cross-section regression methods to test the effect of different underwriter reputation measurement methods on IPO performance. The dependent variable is short-term and long-term IPO performance. The independent variable is four underwriter reputation categories represented by three-level dummy variables. We found that only underwriter reputation measured by IPO frequency can explain IPO performance. The findings suggest IPO frequency help underwriter understand the market condition and value IPO more accurately. Firms that want to reduce the cost of IPO underpricing should choose underwriters with a higher IPO frequency.
This study provides empirical evidence on the short term and the long term effects of initial public offering (IPOs) by firms, on their competitor firms’ performance in Indonesia. We perform short-run and long-run event studies and cross sectional regressions over the period 2010 to 2017 and find that both IPO firms and their competitors experience positive stock returns in the short-run and in the long-run. We find that IPO firms’ stock performance is relatively stable in the long-run that enables the competitor firms’ stock returns to catch up with IPO firms’ stock performance. We find negative effect of IPO firms’ stock performance on their competitors’ stock performance in the short-run, and a positive effect in the long-run. Our findings imply that IPO firms provide good information to the industry and no obvious competitive landscape changes are observed.
Firm can minimize their tax obligation by debt tax shield and non-debt tax shield (NDTS). However, research findings on how firm treat debt tax shield and NDTS, as a substitute or as a complement, remain inconclusive. This paper objective is to provide evidence on how firm usage of NDTSchange when tax rates change in Indonesia. Multivariate regression analysis performed with NDTSas dependent variable and tax rates change and debt level as independent variable. Multivariate regression analysis covering 73 Indonesia firms with 146 observations for the period of year 2008 to year 2010. Within this period, Indonesia corporate tax rate being reduce twice from 30% in 2008 to 28% in 2009 and 25% in 2010. This research find when tax rates is decrease, public firm increase their usage of NDTSwith a lag of one year and debt financing remain increased alongside with non-debt tax shield. This finding provide support to debt tax shield and NDTSas a complement.
Investor has cognitive limitation in the form of limited information-processing capacity relative to the amount of information available to them. This limitation force investors to optimize their valuable resources by focusing only to a specific set of information based on their unique preference. Since different industry have different information complexities, different industries will have different investor segment in terms of investor number, investor sophistication, and investor speed to gather and to comprehend information from other industry. We investigate the prevalence of investor’s limited information-processing capacity in Indonesian stock market using autoregressive model. We used monthly data from 31 December 1999 to 30 September 2015 to identify whether there are industries that consistently lead other industries. We find only mining industry return, with small market capitalization only 3.3% relative to total Jakarta Composite Index market capitalization, which consistently leads Jakarta Composite Index return for one to two months.
The study uses quantitative method to estimate the effect of Corporate- and Dividend-Income-Tax rates on Total-Bank-Capital, Tier-1-Bank-Capital, and Tier-2-Bank-Capital ratios. The samples are banks from ASEAN-4 countries, i.e. Indonesia, Malaysia, The Philippines, and Thailand, taken in 2020. The effects of Corporate- and Dividend-Income-Tax on Total-Bank-Capital, Tier- 1-Bank-Capital, and Tier-2-Bank-Capital ratios were analyzed using cross-section regression. We placed Total-Bank-Capital, Tier-1-Bank-Capital, and Tier-2-Bank-Capital ratios as the dependent variable. Corporate- and DividendIncome-Tax rates were placed as the independent variable. Both Corporate and Dividend-Income-Tax rates are statistically significant and positively affect the Total-Bank-Capital and Tier-1-Bank-Capital. The findings suggest that high Corporate- and Dividend-Income-Tax rates reduce banks’ significant risks. Corporate-Income-Tax rates and negatively affect Tier-2-Bank-Capital. The finding suggests that lower tax rates will induce banks to increase their Tier-2- Bank-Capital ratio. However, the effect of Dividend-Income-Tax rates on Tier-2- Bank-Capital is not statistically significant.
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