Underpricing, subsequent equity offerings, and the long-run performance of Japanese IPOs

Takehiko Isobe, Akitoshi Ito, Joseph P. Kairys

研究成果: Article査読

2 被引用数 (Scopus)

抄録

Using data on IPOs that are issued in Japan during January 1975-March 1989, we examine the deliberate underpricing and overreaction hypotheses to explain high initial returns at offering dates. Specifically, we analyze the cross-sectional pattern of the short- and long-run performance of IPOs. The obtained results indicate that the deliberate underpricing theories which we examine are unable to explain the high initial returns on the Japanese IPOs. Furthermore, for the average of the IPOs, the empirical results are not consistent with the overreaction hypothesis. However, there is evidence consistent with the hypothesis that for a certain minority group of IPOs, the high initial returns occur due to overreactions by investors. We interpret the overall results as indicating that the high initial returns on the Japanese IPOs can be attributed to a mixture of both underpricing and investor overreaction. We conjecture that the binding regulations in Japan led to underpricing.

本文言語English
ページ(範囲)237-259
ページ数23
ジャーナルAsia-Pacific Financial Markets
5
3
DOI
出版ステータスPublished - 1998 1 1
外部発表はい

ASJC Scopus subject areas

  • Finance

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