Initial and Long-Run Ipo Returns in Central and Eastern Europe

Abstract

Initial Public Offerings constitute one of the most important activities in corporate finance, bringing substantial amounts of new capital to the corporate sector. Floating stock is a commonly used method for companies to gain new capital for new investments, to refinance their investments, or to adjust their debt/equity ratio. In this paper we will examine Central and Eastern Europe IPO in terms of initial and long-run returns. Warsaw Stock Exchange (WSE) is currently among the leading European stock markets in terms of initial public offerings. The IPO activity on the Polish capital market contrasts sharply with the number of new listings performed in other Central and Eastern European countries (CEE) however all region is important in terms of capital market. The main goal of the paper is to examine IPOs and its underpricing in the period 2000-2012 on the stock exchanges of Warsaw,