Abstract

http://ssrn.com/abstract=1594288
 
 

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The Impact of Institutional Quality on Initial Public Offerings


Don M. Autore


Florida State University - College of Business

Thomas Jason Boulton


Miami University

Scott Smart


Indiana University - Kelley School of Business - Department of Finance

Chad J. Zutter


University of Pittsburgh - Finance Group

January 1, 2014

Journal of Economics and Business, Vol. 73, No. 1, 2014

Abstract:     
Country-level institutional quality is positively correlated with the underpricing of initial public offerings (IPOs). The association is strong for IPOs issued in developed markets, but nearly absent for emerging market IPOs. We hypothesize that extra-legal institutions, including financial reporting practices, law enforcement, public trust, and outside monitoring affect the availability and value of private benefits of control accessible to entrepreneurs, which in turn shapes the relation between institutional quality and IPO underpricing. Our evidence supports prior studies that suggest that underpricing is motivated, at least in part, by entrepreneurs’ desire for post-IPO control.

Number of Pages in PDF File: 52

Keywords: International finance, Initial public offerings, Governance, Investor protection

JEL Classification: G15, G24, G30, G32, G34

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Date posted: April 23, 2010 ; Last revised: September 23, 2014

Suggested Citation

Autore, Don M. and Boulton, Thomas Jason and Smart, Scott and Zutter, Chad J., The Impact of Institutional Quality on Initial Public Offerings (January 1, 2014). Journal of Economics and Business, Vol. 73, No. 1, 2014. Available at SSRN: http://ssrn.com/abstract=1594288 or http://dx.doi.org/10.2139/ssrn.1594288

Contact Information

Don M. Autore
Florida State University - College of Business ( email )
821 ACADEMIC WAY, Room 314 RBA
P.O. Box 3061110
Tallahassee, FL 32306-1110
United States
850-644-7857 (Phone)
Thomas Jason Boulton (Contact Author)
Miami University ( email )
Oxford, OH 45056
United States
(513) 529-1563 (Phone)
(513) 529-8598 (Fax)
Scott B. Smart
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Kelley School of Business
Bloomington, IN 47405
United States
812-855-3401 (Phone)
812-855-5875 (Fax)

Chad J. Zutter
University of Pittsburgh - Finance Group ( email )
352 Mervis Hall, Katz GSOB
University of Pittsburgh
Pittsburgh, PA 15260
United States
412-648-2159 (Phone)
412-648-1693 (Fax)
HOME PAGE: http://www.pitt.edu/~czutter/
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