Market manipulation rules and IPO underpricing

Duong, Huu Nhan, Goyal, Abhinav, Kallinterakis, Vasileios ORCID: 0000-0001-6217-1188 and Veeraraghavan, Madhu (2021) Market manipulation rules and IPO underpricing. JOURNAL OF CORPORATE FINANCE, 67 (April ). p. 101846.

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Abstract

Using a large sample of 13,459 initial public offerings (IPOs) from 37 countries, we find that trading rules on market manipulation reduce IPO underpricing. The effect is weaker for IPOs certified by reputable intermediaries, in countries with greater shareholder rights protection, better financial reporting quality, and after the adoption of International Financial Reporting Standards. Better trading rules on market manipulation are also related to higher IPO proceeds, subscription-level, and trading volume, lower IPO listing fees, and better long-term post-IPO performance. Our findings are consistent with the notion that exchange trading rules mitigate information asymmetry problems for investors, resulting in lower IPO underpricing.

Item Type:	Article
Additional Information:	Source info: Journal of Corporate Finance, Forthcoming
Uncontrolled Keywords:	Exchange trading rules, Market manipulation, IPO pricing, Information asymmetry
Depositing User:	Symplectic Admin
Date Deposited:	11 Jan 2021 09:16
Last Modified:	18 Jan 2023 23:04
DOI:	10.1016/j.jcorpfin.2020.101846
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3113165