10.4225/03/5934b6a2f4145
Pham, Peter K.
Peter K.
Pham
Kalev, Petko S.
Petko S.
Kalev
Steen, Adam B.
Adam B.
Steen
Underpricing, Stock Allocation, Ownership Structure and Post-Listing Liquidity of Newly Listed Firms
Monash University
2017
monash:2104
Ownership structures
Underpricing
Initial public offerings
2000
1959.1/2104
Allocation process
Post-listing liquidity
2017-06-05 01:40:49
Journal contribution
https://bridges.monash.edu/articles/journal_contribution/Underpricing_Stock_Allocation_Ownership_Structure_and_Post-Listing_Liquidity_of_Newly_Listed_Firms/5072455
This study investigates the relationships between underpricing, ownership structure and post-listing liquidity of Initial Public Offerings (IPOs). It is argued that increasing the degree of underpricing induces both broader investor participation and creates a more diffuse ownership structure. These two factors in turn are positively associated with the level of post-listing trading, and therefore offer an explanation of how underpricing can influence liquidity. Our results indicate that underpricing is related to the shareholder distribution formed after the allocation process. Moreover, it is positively associated to post-listing liquidity. These relationships are robust and possess a high degree of statistical and economic significance.