Does IPO underpricing affect long-term growth performance? An analysis of underpriced IPOs in Jakarta stock exchange

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Does IPO underpricing affect long-term growth performance? An analysis of underpriced IPOs in Jakarta stock exchange

Eko, Stanislaus - Personal Name; Bustaman, Yosman - Personal Name;

Signaling model and other theories such as Rock's winner curse suggest that underpricing is a signal to show firm's quality. The study develops to prove that theory by finding the correlation of IPO underpricing and long-term growth of underpriced firms. The accounting measurements used are gross sales, EBIT, and fixed assets. It compares the coefficient of correlation and coefficient of determination for 4 consecutive years after the IPO. The findings show that the correlation between IPO underpricing and long-term growth is very weak and statistically insignificant. This shows that IPO underpricing in Indonesia is not a signal of firm's quality when measured by sales, EBIT, and fixed assets long-term growth rates.

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Series Title: -
Call Number: 402
Publisher: : Swiss German University., 2008
Collation: -
Language: English
ISBN/ISSN: -
Classification: NONE
Content Type: -
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Edition: -
Subject(s): IBA
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