The Impact of Emerging Stock Market on the Pricing of IPOs

• Main Authors: Trae-Ling Chang, 張翠玲
• Other Authors: Shin-Herng Chu
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/40862983274726767137

碩士 === 逢甲大學 === 財務金融學所 === 92 === This paper investigates whether the establishment of the Emerging Stock Market (ESM) can increase transparency in the pricing and distribution of initial public offerings (IPOs). A sample of 336 electronic firms going public during the period from January 1999 to December 2003 was selected and 154 firms went through the ESM listing. We find that the IPO underpricing is lower for the ESM listing firms, and the price adjustment is more efficient for the ESM listing firms than the non-ESM listing firms. Moreover, during the post-IPO period, the trading turnover ratio and price volatility are significantly lower for the ESM listing firms than the non-ESM listing firms. Through regression analysis, transaction lot size and pre-IPO stock performance can explain, to some degree, the IPO underpricing. Our results show that the ESM can reduce the information asymmetry problem, hence, lower the investment risk involved in the IPO process.