44 Pages Posted: 1 Feb 1997
Date Written: January 1997
This study examines a unique Finnish database comprising 85,384 investors and 29 IPOs. The evidence indicates that on average institutional investors do not realize larger initial returns than retail investors, as the incentive to acquire information is limited by allocation rules which favor small orders. Within each investor category, however,large orders are associated with the best performance, suggesting that information differences figure more importantly within rather than between categories. A record of successful investment performance encourages an investor to continue using the same investment bank but has no reliable effect on order size in subsequent IPOs.
JEL Classification: G10
Suggested Citation: Suggested Citation
Keloharju, Matti, The Distribution of Information Among Institutional and Retail Investors and the Impact of Past Investment Performance on the Demand for IPOs (January 1997). Available at SSRN: https://ssrn.com/abstract=1126 or http://dx.doi.org/10.2139/ssrn.1126