Differential information and the underpricing of initial public offerings: Australian evidence

Article Abstract:

This paper provides evidence on underpricing in Australia using 340 industrial initial public offerings over the period 1980 to 1990. It aims to explain why underpricing is consistent with rational behavior by focusing on differential information across IPO firms. We measure differential information along two dimensions, the quality and the quantity of information. We propose that the quality of information is reflected in the reputation of independent advisers to the preparation of the issuing firm's prospectus. Three such independent external advisers are examined: the investigating accountant, the underwriter, and the expert. The results provide strong support for the reputation effect of the underwriter on underpricing. Although there is evidence showing a negative relation between underpricing and the reputation of the investigating accountant and the expert, it is not significant. Our results also support the differential quantity of information hypothesis. Firms with more information available are, on average, less underpriced. (Reprinted by permission of the publisher.)

Research, Disclosure (Securities law)

---

The relationship between unsystematic security returns and earnings forecast errors

Article Abstract:

This paper extends the Australian evidence on the information content of earnings announcements by considering both the sign and magnitude of unexpected earnings for a sample of 120 firms in the period 1964-1972, and a further 117 firms for 1972-1980. Results at both the portfolio level and the individual security level are highly significant and are consistent with those documented in both the United States and New Zealand. (Reprinted by permission of the publisher.)

Forecasts and trends, Earnings per share

---

Corporate governance, insider ownership and operating performance of Australian initial public offerings

Article Abstract:

The influence of ownership structure, corporate governance on the performance of stocks offered through initial public offerings is examined, by focusing on Australian companies.

Australia, Strategy & planning, Management dynamics, Management, Planning, Evaluation, Corporate governance, Company business management, Company public offering, Company business planning, Organizational structure

Similar abstracts:

• Abstracts: Underpricing and firm quality in initial public offerings: evidence from Singapore. The reversal of the Monday effect: new evidence from US equity markets
• Abstracts: Management information changes and functional fixation: some experimental evidence from the public sector. Methodological problems in functional fixation research: criticism and suggestions
• Abstracts: An empirical test of the impact of managerial self-interest on corporate capital structure. A note on the welfare consequences of new option markets
• Abstracts: Integration vs. segmentation in the Canadian stock market. Testing the CAPM with time-varying risks and returns
• Abstracts: Cultural differences and shareholder value in related mergers: linking equity and human capital. Types of synergy and economic value: the impact of acquisitions on merging and rival firms

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.