The Partial Adjustment of IPO Prices to Public Information and Issuing Methods in Taiwan

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Title:	The Partial Adjustment of IPO Prices to Public Information and Issuing Methods in Taiwan
Authors:	Hsieh, Chih-jou
Contributors:	淡江大學國際企業學系
Keywords:	Initial public offerings;Partial adjustment;Underpricing
Date:	2012-11-30
Issue Date:	2013-10-04 16:12:47 (UTC+8)
Publisher:	Amsterdam: Elsevier BV North-Holland
Abstract:	Using 1997 to 2009 exchange-listed data, we examine the treatment of public information by underwriters throughout the entire initial public offering (IPO) price-setting process in Taiwan. We find that regardless of which mechanism (fixed-price, auctions, or book-building) an issuer has chosen, the partial adjustment of the IPO offer prices to public information is evident in our study. Although both fixed-price and book-built issues show a modest but statistically significant relationship between market returns and the level of initial returns, we find economically meaningful effects for both issuing methods. Our findings also demonstrate that auctioned IPOs exhibit strong evidence of partial adjustment to market returns. That is to say, the estimated effect is statistically and economically significant. Therefore, we attempt to provide rational explanations for such phenomena.
Relation:	Pacific-Basin Finance Journal 20(5), pp.660-687
DOI:	10.1016/j.pacfin.2012.03.003
Appears in Collections:	[Graduate Institute & Department of International Business] Journal Article

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