IPO Characteristics of the Index Firms

Abstract:     
This study analyzes the IPOs of the firms that are eventually included in one of the three well-known indices: the S&P 400, the S&P 500, or the S&P 600 Indices. The determinants of each IPO firm's odds of inclusion into a particular index are estimated. Other offer related characteristics of these index firms are also investigated. IPOs that are associated with less uncertainty at the time of issuance, have better inclusion odds into an index. The quality of index firms has a persistent component to it that can be detected even during the IPO process. A new hypothesis is proposed with regard to the possible biases of the Standard&Poor's Index Committee.

Number of Pages in PDF File: 26

Keywords: Initial Public Offerings, S&P 400, S&P 500, S&P 600

JEL Classification: E32, G10, G24, G30

working papers series