Signaling by IPO Under-Pricing: Evidence from Central Europe
Author: | Mgr. Aleš Čornanič |
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Year: | 2011 - summer |
Leaders: | doc. Jiří Novák M.Sc., Ph.D. |
Consultants: | |
Work type: | Finance, Financial Markets and Banking Masters |
Language: | English |
Pages: | 85 |
Awards and prizes: | M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance. |
Link: | |
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 |