Value Gains on Flotation and IPO Underpricing

PC Hill, N Wilson

Research output: Contribution to journalArticle (Academic Journal)

10 Citations (Scopus)

Abstract

Utilising a unique dataset of 502 UK IPOs we undertake an empirical analysis of the relationship between underpricing and value gains on flotation. We find support for our hypothesis that IPO underpricing is related to the extent of anticipated value gains on the private to public transition. We analyse alternative driving mechanisms behind this relationship, and our results suggest that the underpricing of IPOs is driven by both underwriters and issuing company directors, each of whom derive net benefits over the longer term from underpricing at the IPO.
Translated title of the contributionValue Gains on Flotation and IPO Underpricing
Original languageEnglish
Pages (from-to)1435 - 1459
Number of pages25
JournalJournal of Business Finance and Accounting
Volume33 (9-10)
DOIs
Publication statusPublished - Nov 2006

Bibliographical note

Publisher: Blackwell

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