Signaling by IPO Under-Pricing: Evidence from Central Europe
|Author:||Mgr. Aleš Čornanič|
|Year:||2011 - summer|
|Leaders:|| doc. Jiří Novák M.Sc., Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:||M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance.|
|Abstract:||This Master Thesis is focused on under-pricing of initial public offering. We examine the
possibility of signaling by IPO under-pricing on Polish data over the period 2005 – 2010.
Signaling by IPO under-pricing is analyzed using signaling model. Taking into
consideration the uniqueness of Polish sample, we also analyze the signaling by IPO underpricing
used to the build up the government reputation as market-oriented. Our results
suggest the statistical significant positive effect of IPO under-pricing on probability of
seasoned equity issue as well as on size of seasoned issue. These findings together with
negative relation between IPO under-pricing and lag between IPO and seasoned issue are
consistent with predictions of signaling model. We do not find any statistical significant
evidence that the Polish government tries to build up reputation for its privatization policy
over time by under-pricing and selling a high fraction at the initial offer.
|Downloadable:|| Diploma thesis of Čornanič