Analyst Coverage of IPO Firms and Securities Laws: A Cross-Country Analysis

27 Pages Posted: 19 Jan 2013 Last revised: 31 Jan 2013

See all articles by Romain Boissin

Romain Boissin

University of Montpellier

Patrick Sentis

MRM-Université Montpellier 1; GSCM-Montpellier Business School

Date Written: January 1, 2013


We examine, over the period from 1991 to 2010, the influence of legal environment on the ability of financial analysts to discriminate between good and bad IPOs. We find, after controlling for IPO firm-specific characteristics as well as country-specific characteristics, significant difference in the long-run returns of non-orphan and orphan IPOs carried out in countries with high-legal-environment. The opposite result appears in countries with low-legal-environment. This evidence suggests that financial analysts may discriminate between good and bad IPOs only in countries with high-legal-environment. Hence, analyst coverage is informative only for IPO firms which evolve in such countries.

Keywords: IPOs, analyst coverage, securities laws, long-run performance

JEL Classification: G14, G24

Suggested Citation

Boissin, Romain and Sentis, Patrick, Analyst Coverage of IPO Firms and Securities Laws: A Cross-Country Analysis (January 1, 2013). Available at SSRN: or

Romain Boissin (Contact Author)

University of Montpellier ( email )

Avenue de la Mer Site Richter
163 Rue Auguste Broussonnet
Montpellier, Cedex 2 34090

Patrick Sentis

MRM-Université Montpellier 1 ( email )

34960 Montpellier Cedex 1

GSCM-Montpellier Business School ( email )

2300, Avenue des Moulins
Montpellier, 34185

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