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Czasopismo
2014 | nr 4 | 591--604
Tytuł artykułu

Initial Public Offerings: Is There Money Left on the Table? Comparative Study of the Top Five IPOs in Poland and the United States

Warianty tytułu
Initial Public Offerings: Is There Money Left on the Table? Comparative Study of the Top Five IPOs in Poland and the United States
Języki publikacji
EN
Abstrakty
EN
Initial public offerings (IPO) have been attracting remarkable public attention since the late 1990s, especially during the dotcom bubble years. Despite their positive role in creating new companies, IPOs have been connected with many controversies and unsolved questions. Because of that, IPOs have been a subject of significant academic attention, and most articles have been focused on the major issues relating to: hot markets, underpricing, and long-run performance. This paper presents a theoretical overview, supported by an empirical study, based on the largest IPOs in Poland and the US, between 2000 and 2005, focusing on the un-derpricing and the long-run performance phenomenon. The observed period was chosen particularly in order to avoid the dotcom bubble and the financial crises years. Thus, the period was chosen in order to avoid the data being affected by the positive effects of the dotcom bubble, characterized by spectacular returns, as well to avoid the data being affected by the negative effects of the financial crises, characterized by a significant and sudden decrease in the stock market capitalizations. Poland was chosen for the study because of its remarkable performance during the crisis, and because of the fact that Poland has built a successful financial sector, which has gained the importance extending beyond the national level. The US was, on the other hand, chosen because it remains the biggest IPO market in the world. (fragment of text)
Initial public offerings (IPO) have been attracting remarkable public attention since the late 1990s, especially during the dotcom bubble years. Despite their positive role in creating new companies, IPOs have been connected with many controversies and unsolved questions. Because of that, IPOs have been a subject of significant academic attention, and most articles have been focused on the major issues relating to: hot markets, underpricing, and long-run performance. This paper presents a theoretical overview, supported by an empirical study, based on the largest IPOs in Poland and the US, between 2000 and 2005, focusing on the un-derpricing and the long-run performance phenomenon. The observed period was chosen particularly in order to avoid the dotcom bubble and the financial crises years. Thus, the period was chosen in order to avoid the data being affected by the positive effects of the dotcom bubble, characterized by spectacular returns, as well to avoid the data being affected by the negative effects of the financial crises, characterized by a significant and sudden decrease in the stock market capitalizations. Poland was chosen for the study because of its remarkable performance during the crisis, and because of the fact that Poland has built a successful financial sector, which has gained the importance extending beyond the national level. The US was, on the other hand, chosen because it remains the biggest IPO market in the world. (fragment tekstu)
Czasopismo
Rocznik
Numer
Strony
591--604
Opis fizyczny
Twórcy
  • University of Kragujevac, Serbia
  • Singidunum University
  • University of Kragujevac, Serbia
Bibliografia
  • Brav A., Gompers A.P., Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture and Nonventure Capital-Backed Companies, "The Journal of Finance" 1997, no. 52(5).
  • Beatty R.P., Ritter R.J., Investment Banking, Reputation, and the Underpricing of Initial Public Offerings, "Journal of Financial Economics" 1986, no. 15.
  • Demirguc-Kunt A., Maksimovic V. (1998), Law, Finance and Firm Growth, "Jounal of Finance" 1998, vol. 53.
  • Draho J., The IPO Decision - Why and How Companies Go Public, Edward Elgar Publishing Limited, Cheltenham 2004; Glos GL50 1UA, UK Enterprise Surveys - World Bank (2009), http://www. enterprisesurveys.org/
  • Engelen P.-J., van Essen M., Underpńcing of IPOs: Firm-, Issue- and Country-specific Characteristics, "Journal of Banking & Finance" 2010, vol. 34.
  • Hallwood CP, MacDonald R., International Money and Finance, 3rd ed., Blackwell Publishing Ltd, Oxford 2000.
  • Ibbotson R.G., Price Performance of Common Stock New Issues, "Journal of Financial Economics" 1975, no. 2(3).
  • Kahneman D., Tversky A., Prospect Theory: An Analysis of Decision under Risk, "Econometrica" 1979, no. 47(2).
  • Kennedy B.D., Sivakumar R., Vetzal R.K., The Implications of IPO Underpricing for the Firm and Insiders: Tests of Asymmetric Information Theories, "Journal of Empirical Finance" 2006, no. 13.
  • Kleeburg PR., Initial Public Offerings, Texere - The Thomson Corporation, Crawfordsville 2005.
  • Loughran T., Ritter J.R., Why Don't Issuers Get Upset About Leaving Money on the Table in IPOs?, AFA 2001 New Orleans Meetings, 21 August 2000.
  • Loughran T., Ritter R.J., The New Issues Puzzle, "The Journal of Finance" 1995, no. 50(1).
  • Levine R., Stock Markets, Growth, and Tax, "The Journal of Finance" 1991, no. 46(4).
  • Liu X., Ritter R.L., Local Underwriter Oligopolies and IPO Underpricing, "Journal of Financial Economics" 2011, no. 102.
  • Pilbeam K., Finance & Financial Markets, 3rd Edition, Palgrave Macmillan, Houndmills, Basingstoke.
  • Rajan G.R., Zingales L., Financial Dependence and Growth, "The American Economic Review" 1998, no. 88(3).
  • Rajan R., Servaes H., Analyst Following of Initial Public Offerings, "The Journal of Finance" 1997, no. 52(2).
  • Rock K., Why New Issues are Underpriced, "Journal of Financial Economics" 1986, no. 15(1-2).
  • Ritter R.J., The 'Hot Issue'Market of 1980, "Journal of Business" 1984, vol. 57.
  • Ritter R.J., The Long-Run Performance of Initial Public Offerings, "The Journal of Finance" 1991, no. 46(1).
  • Shiller J.R., Irrational Exuberance, 2nd ed., Princeton University Press, Princeton 2005.
  • Spiess D.K., Pettaway H.R., Issue Proceeds, Owner/Managers' Wealth, and the Underpricing Signal, "Journal of Banking & Finance" 1997, vol. 21.
  • World Bank, World Development Report, Washington 1989.
  • Yoon J.Ch., Inefficiencies from Financial Liberalization in the Absence of Well-Functioning Equity Markets, "Journal of Money, Credit and Banking" 1980, no. 18(2).
Typ dokumentu
Bibliografia
Identyfikatory
Identyfikator YADDA
bwmeta1.element.ekon-element-000171283365

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