Does IPO subscription demand affect investor herd behavior in Taiwan?

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Please use this identifier to cite or link to this item: https://tkuir.lib.tku.edu.tw/dspace/handle/987654321/110458

Title:	Does IPO subscription demand affect investor herd behavior in Taiwan?
Authors:	Chao-Shi Wang;Hui-Wen Tang;Roger C.Y. Chen
Keywords:	Herd behavior;Information cascades;Initial public offerings overreaction;Winner's curse
Date:	2017-09-25
Issue Date:	2017-07-04 02:11:02 (UTC+8)
Abstract:	Taiwan's initial public offerings (IPOs) are primarily fixed-price methods, public subscription issues that only allow individual investors to participate. The Taiwan Stock Exchange discloses subscription demand information, after which individual investors request the highest subscription rate shares; this can lead to herding. The empirical results of this study showed that investors exhibit increased attraction toward IPOs with extremely high subscription demand. After identifying sample issues with herd features, herd behavior in Taiwan's IPO market was found to be consistent with the “winner's curse” theory. Additionally, investors overreacted to subscription demand in the short run, which leads to negative long-term returns.
Relation:	International Review of Economics & Finance 51, p.258–272
DOI:	10.1016/j.iref.2017.06.004
Appears in Collections:	[Graduate Institute & Department of Insurance Insurance] Journal Article

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