This paper investigates both theoretically and empirically the impact of market structure on price discovery process at opening trading IPOs. Some papers suggest that IPO value uncertainty is not fully resolved offering but continues into aftermarket. Our model predicts this ex-post uncertainty, i.e. residual about firm in aftermarket, related to level fragmentation further consolidated markets...

We analyse a regulatory change in the Japanese IPO market that created an abrupt shift from hybrid price-discriminatory auctions to bookbuilding. find bookbuilding leads significantly higher underpricing than auctions. Further, we evidence price accuracy tends be for The results hold under variety of OLS specifications and with regression discontinuity designs exploiting regulation. suggest int...

We study how ongoing relationships between lead underwriters and institutional investors affect initial public offering (IPO) pricing. By introducing a new approach, we find that stronger reduce the partial adjustment of offer price, leaving ‘excess underpricing’ favors regular investors, especially in hot IPOs, while generating an agency cost for issuers. At same time, to higher prices, since ...

This study is devoted to analyzing the development of the GKO market in Russia. The period of time considered is September 1996-September 1997. Interaction of two segments of the market is analyzed: futures market and secondary market. It is proved that there exists a risk premium on the futures market that leads to underpricing on the futures market. That is the futures price is no longer an u...

This paper examines the longer-term performance of IPOs from the expiration of the stabilization period to three years after the IPO. It seeks to determine whether employee stock options (ESOs) affect long-term market-adjusted performance after controlling for other influential factors previously uncovered in the IPO and compensation literature, such as executive cash compensation, profitabilit...