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IPO Characteristics of Index Firms

26 Pages Posted: 21 Nov 2009 Last revised: 15 Oct 2013

Gonul Colak

Hanken School of Economics

Date Written: December 27, 2012

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.

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

JEL Classification: E32, G10, G24, G30

Suggested Citation

Colak, Gonul, IPO Characteristics of Index Firms (December 27, 2012). Available at SSRN: https://ssrn.com/abstract=1510288 or http://dx.doi.org/10.2139/ssrn.1510288

Gonul Colak (Contact Author)

Hanken School of Economics ( email )

P.O. Box 479
FI-00101 Helsinki, 00101
Finland

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