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Cross-country IPOs: What explains differences in underpricing?

Banerjee, Suman; Dai, Lili; Shrestha, Keshab


We study the impacts of country-level information asymmetry, investors' home-country bias, effectiveness of contract enforcement mechanisms, and accessibility of legal recourse on IPO underpricing in 36 countries around the globe. We find evidence consistent with all four of our hypotheses. First, we find a positive and significant effect of country-level information asymmetry on IPO underpricing. Second, our empirical evidence is consistent with the agency-cost-based explanation of IPO...[Show more]

CollectionsANU Research Publications
Date published: 2011
Type: Journal article
Source: Journal of Corporate Finance
DOI: 10.1016/j.jcorpfin.2011.06.004


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