Underwriter reputation and IPO underpricing: The role of institutional investors in the Chinese growth enterprise market

Hu, Yi; Dai, Tiantian; Li, Yong; Mallick, Sushanta; Ning, Lutao; Zhu, Bo

doi:10.1016/j.irfa.2021.101956

Cited by 23 publications

(5 citation statements)

References 41 publications

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“…This factor can be used by investors and analysts as an important financial performance indicator in assessing the intrinsic value of the company and predicting future stock price movements. Therefore, it should be considered in the analysis of stock underpricing, along with market factors, investor sentiment, economic conditions, and specific industry factors.Although Return on Equity (RoE) has not been proven to have a partial influence on the level of stock underpricing in this analysis, this is consistent with the research findings of Astuti & Djamaluddin (2021),Barros et al (2021),Hu et al (2021),Kumar &Peng et al (2021). The factor of Return on Equity (RoE) does not help interpret its role in predicting stock underpricing.…”

supporting

confidence: 76%

The Influence of Financial Indicators and Underwriter Reputation on Depreciated Stock Prices

Gunanto

2023

JAF

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This research aims to analyze the influence of financial indicators and underwriter reputation on the level of stock underpricing during Initial Public Offerings (IPOs) on the Indonesia Stock Exchange (IDX). The phenomenon of underpricing has gained attention in securities market research in various countries. This study adopts a conceptual analysis approach based on a review of existing literature. The theory of asymmetric information also serves as the foundation for explaining the underpricing phenomenon in IPOs. Factors include Return on Equity (RoE), Financial Leverage, Current Ratio, Earnings per Share (EPS), Size, Proceeds, Company Age, Auditor Reputation, Underwriter, and Industry Type. Therefore, this research aims to test the influence of financial indicators and underwriter reputation on the level of stock underpricing in IPOs on the IDX. Consequently, the findings from this research can be used as a basis for comparison with similar studies in other countries. This can help in understanding the differences and similarities in the phenomenon of stock valuation in various global capital markets. Keywords: IPO Underpricing, Financial indicators and Underwriter reputation

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confidence: 76%

The Influence of Financial Indicators and Underwriter Reputation on Depreciated Stock Prices

Gunanto

2023

JAF

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“…Since reputable underwriters are associated with lower IPO risk, the incentive to obtain information will be lower, thereby reducing uninformed investors (Carter & Manaster, 1990). In addition, reputable underwriters could reduce IPO underpricing by minimizing the gap between offering and listing, selecting high-quality firms to underwrite, and reducing information asymmetry between issuers and investors (Hu et al, 2021). Several studies support a negative relationship between underwriter reputation and IPO underpricing (Chemmanur & Krishnan, 2012;Gusni et al, 2019;Kotlar et al, 2017;Tong & Ahmad, 2015;Utamaningsih et al, 2013;Wang & Yung, 2011;Yan et al, 2019;Yuliani et al, 2019).…”

Section: Signaling Theory Information Asymmetry Underwriter Reputatio...mentioning

confidence: 99%

Information asymmetry, corporate governance, and IPO underpricing: Evidence in Indonesia

Pelawi,

Pelawi

2023

jeb

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This paper analyzes the relationships between information asymmetry, corporate governance, and IPO underpricing in the Indonesian IPO market. Previous studies on underpricing IPO have shown mixed results, offering several interesting research gaps to explore, especially in emerging markets. Accordingly, the purpose of the research is to examine further whether information asymmetry and corporate governance are the causes of IPO underpricing. A purposive technique is used, and 318 samples of IPOs are selected from 2010 to 2020 on the Indonesian Stock Exchange (IDX). Next, a multiple regression model is developed and tested using the EViews 9 software. Our evidence shows that underwriter reputation negatively affects IPO underpricing, indicating a high level of information asymmetry in the Indonesian IPO market. Further, our evidence reveals that board size and number of employees negatively affect IPO underpricing. Meanwhile, manager and family ownership exhibit insignificant results due to the pyramidal ownership structure. Finally, we also find that reputable underwriters charge higher underwriting fees than non-reputable ones. In general, our study demonstrates that hiring a reputable underwriter and implementing good corporate governance practices can minimize underpricing during the IPO.

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“…There are conflicting findings regarding the relation between underwriter reputation and IPO underpricing mitigation. For the Chinese market, one study reveals that underwriters' prestige reduces underpricing (Hu et al. , 2021), while another finds no significant influence of underwriter reputation on underpricing (Su and Bangassa, 2011).…”

Section: Content Analysismentioning

confidence: 99%

Decrypting IPO pricing: an integrated bibliometric and content analysis approach

Joshipura

Mathur²,

Gwalani³

2022

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PurposeSince 2018, there has been a resurgence in initial public offering (IPO) pricing studies. The authors aim to consolidate the knowledge and explore current dynamics, understand knowledge progression, elicit trends, and provide future research directions for IPO pricing research.Design/methodology/approachThe authors conducted a two-stage hybrid review based on 512 high-quality Scopus articles on IPO pricing published over the last decade. The authors deploy bibliometric analysis, and then, based on 61 curated articles, the authors conduct content analysis and offer future research directions.FindingsFour key research streams emerged: information asymmetry, agency problems, legal, regulatory, and social environment, and behavioral finance. Future research may focus on behavioral explanations for IPO underpricing, the role of investor sentiment in IPO pricing, text analytics, machine learning, and big data in alleviating information asymmetry and agency problems. The authors summarize and present content analysis using the classic Theory, Context, Characteristics, Methods (TCCM) framework.Research limitations/implicationsUsing different databases, bibliometric analysis tools, sample period or article screening criteria for the study might give different results. However, the study's major findings are robust to alternative choices.Practical implicationsThis study serves as a ready reckoner for the research scholars, practitioners, regulators, policymakers, and investors interested in understanding the nuances of IPO pricing.Originality/valueThe study sheds light on the most influential documents, authors, and journals, offers an understanding of knowledge structure, identifies and discusses primary research streams and related implications, and provides future research directions.

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Underwriter reputation and IPO underpricing: The role of institutional investors in the Chinese growth enterprise market

Cited by 23 publications

References 41 publications

The Influence of Financial Indicators and Underwriter Reputation on Depreciated Stock Prices

The Influence of Financial Indicators and Underwriter Reputation on Depreciated Stock Prices

Information asymmetry, corporate governance, and IPO underpricing: Evidence in Indonesia

Decrypting IPO pricing: an integrated bibliometric and content analysis approach

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