Underpricing and IPO ownership retention

Robinson, Richard; Robinson, Mary Ann; Peng, Chien-Chih

doi:10.1007/bf02761460

Cited by 16 publications

(9 citation statements)

References 25 publications

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“…Jain and Kini (1994) show that there is a direct relationship between ownership retention and underpricing, yet Mikkelson and Shah (1994) find the inverse relation between these two variables. Non-linear relationship between retention and underpricing is found in the study of Robinson et al (2004). At the retention rate of 45%, underpricing is at its height, but in general, ownership retention is negatively associated with underpricing.…”

Section: Ownership Retention Underwriting Portion and Underpricing (mentioning

confidence: 92%

“…Some previous studies have investigated the relation between ownership retention and underpricing (Mikkelson and Shah, 1994;Jain and Kini, 1994;Jog and McConomy, 2003;Robinson et al, 2004;Gumanti and Niagara, 2006) as well as the link between underwriter reputation and underpricing (Baron, 1982;Rock, 1986;Beatty and Ritter, 1986;Carter and Manaster, 1990;Chen and Mohan, 2002;Jog and McConomy, 2003;Loughran and Ritter, 2004;Sahoo and Rajib, 2009;Dimovski et al, 2011). However, results are inconclusive.…”

Section: Ownership Retention Underwriting Portion and Underpricing (mentioning

confidence: 99%

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Determinants of Intellectual Capital Disclosure in the IPOs and Its Impact on Underpricing: Evidence from Indonesia

Widarjo

Bandi

2017

IJLIC

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We investigate the determinants of intellectual capital (IC) disclosure in the prospectus of initial public offering (IPO). Going deeper, we also examine the impact of IC disclosure on underpricing. By studying 86 IPOs of Indonesian firms over the period of 2000-2014, we do find that ownership retention and underwriting portion have a positive effect on the extent to which IC is disclosed. Moreover, our results reveal that IC disclosure is negatively correlated with the level of underpricing. In addition, evidence is also found that IC disclosure mediates the link between underwriting portion and underpricing.

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Section: Ownership Retention Underwriting Portion and Underpricing (mentioning

confidence: 92%

Section: Ownership Retention Underwriting Portion and Underpricing (mentioning

confidence: 99%

Determinants of Intellectual Capital Disclosure in the IPOs and Its Impact on Underpricing: Evidence from Indonesia

Widarjo

Bandi

2017

IJLIC

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“…Other researchers, using behavioural and agency perspectives (e.g., Wasserman, 2008) have found a positive relationship between founder owner equity and performance, while nonfounder ownership leads to lower performance. Other researchers, however, have found an inverted U shaped curvilinear relationship between individual ownership and IPO performance (e.g., Robinson, Robinson, & Peng, 2004) where higher share retention is argued to lead to better monitoring, and not expropriation. Such a finding is consistent with a behavioural perspective (Cyert & March, 1992;Sur et al, 2013) and best describes the aspirations of the founder or individual owners.…”

Section: Individuals As Ownersmentioning

confidence: 97%

Whose firm is it anyway? Analyzing ownership effects on IPO performance

Sur

Martens

2013

Can J Adm Sci

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This study revisits current practice that ownership holding at IPO has a homogeneous impact on IPO performance. Using signalling theory, we develop and test a conceptual model explaining the relationships between the aggregated ownership structure and IPO price premium. We argue that aggregated ownership has a direct effect on issue price premium, and offer specific hypotheses on the effect of the shares sold during the offering by each type of owner on IPO performance. We use archival data from a sample of US firms that issued IPOs between 1996 and 2000 and find a significant direct effect of ownership configuration, namely, heterogeneity in effect of each ownership type on IPO performance as well as interaction effects between different ownership types. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.Keywords: initial public offering, ownership, issue price premium, signalling theory, aggregated ownership Résumé Cette étude réexamine la pratique courante qui veut que la possession d'un droit de propriété à l'IPO ait un impact homogène sur la performance de l'IPO. À partir de la théorie de la signalisation, l'étude met au point et teste un modèle conceptuel qui rend compte des relations entre la structure de la propriété globale et le cours de l'IPO. Elle soutient que la propriété globale a un impact direct sur le prix émis et propose des hypothèses précises sur l'effet des actions vendues, pendant l'offre par chaque type de propriétaire, sur la performance de l'IPO. Les données d'archive utilisées proviennent d'un échantillon de firmes américaines émettrices d'IPOs entre 1996 et 2000. Les résultats mettent en évidence un effet direct significatif de la configuration de la propriété, notamment de l'hétérogénéité de chaque type de propriété sur la performance de l'IPO. Ils démontrent aussi les effets d'interaction qu'il y a entre les différents types de propriété.

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“…This theory has many impact on this IPO issue. Research work on this issue were conducted by (Robinson and Peng 2004). They have conducted their research on US market which is considered as the largest stock market around the world.…”

Section: Rational Of the Studymentioning

confidence: 99%

What Impacts IPO Underpricing? Evidence from Dhaka Stock Exchange

Sochi¹,

Islam²

2018

IJBM

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Initial Public Offering (IPO) is an important and widely popular research topic among many researchers in finance discipline. This study is prepared to identify the connection among various empirical studies and theories regarding underpricing of IPO in the stock market of Bangladesh. We have chosen the time frame of June 2011 to June 2016 at DSE to conduct the research. In this study, ordinary least square (OLS) regression method is used to identify in what extent the dependent and the independent variables are related in the level of underpricing. The results of the study disclose that oversubscription rate, offer size have substantial influence in IPO underpricing at DSE. On the other hand, offer time and size of the firm do not have significant influence on the level of underpricing. These variables are very significant and play important roles with the level of underpricing at DSE and it shows relation to signaling theory, information asymmetry theory and agency cost theory.

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Underpricing and IPO ownership retention

Cited by 16 publications

References 25 publications

Determinants of Intellectual Capital Disclosure in the IPOs and Its Impact on Underpricing: Evidence from Indonesia

Determinants of Intellectual Capital Disclosure in the IPOs and Its Impact on Underpricing: Evidence from Indonesia

Whose firm is it anyway? Analyzing ownership effects on IPO performance

What Impacts IPO Underpricing? Evidence from Dhaka Stock Exchange

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