Do differences in institutional and legal environments explain cross-country variations in IPO underpricing?

Hopp, Christian; Dreher, Axel (2013). Do differences in institutional and legal environments explain cross-country variations in IPO underpricing? Applied Economics, 45(4), pp. 435-454. Taylor & Francis 10.1080/00036846.2011.605760

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We empirically analyse the determinants of Initial Public Offering (IPO) underpricing using panel data for 24 countries over the period 1988–2005. Our hypotheses stress the importance of institutional and legal factors in explaining cross-country variations. We find evidence that underpricing is higher in countries with stronger protection of outside investors, suggesting that incumbent managers try to use underpricing as a tool to safeguard their private benefits of control when going public. Moreover, the results show that underpricing is reduced when stronger law enforcement and the availability of accounting information reduce the value of private benefits of control.

Item Type:	Journal Article (Original Article)
Division/Institute:	Business School > Business Foundations and Methods
Name:	Hopp, Christian0000-0002-4095-092X and Dreher, Axel
ISSN:	0003-6846
Publisher:	Taylor & Francis
Language:	English
Submitter:	Christian Hopp
Date Deposited:	12 Oct 2020 14:26
Last Modified:	30 Sep 2021 02:18
Publisher DOI:	10.1080/00036846.2011.605760
Related URLs:	Publication
Uncontrolled Keywords:	IPO underpricing, institutions, legal infrastructure, panel data
ARBOR DOI:	10.24451/arbor.12003
URI:	https://arbor.bfh.ch/id/eprint/12003