Value versus Growth in IPOs: New Evidence from Finland

Research in International Business and Finance, Vol. 31, No. 1, pp. 17-31.

37 Pages Posted: 6 May 2013 Last revised: 27 Mar 2014

See all articles by Teemu Hahl

Teemu Hahl

SEB Group

Sami Vähämaa

University of Vaasa

Janne Jaakko Äijö

University of Vaasa, Department of Accounting and Finance

Date Written: October 2, 2013

Abstract

This paper focuses on the underpricing and the short- and long-run performance of Finnish initial public offerings (IPOs). More specifically, we examine whether there are differences between the performance of value and growth stock IPOs in the Finnish stock market. Our results indicate that growth stock IPOs are slightly more underpriced and have marginally higher short-run returns. However, value stock IPOs are better long-run investments and provide higher returns during the first three years in the aftermarket. We also document that the apparent long-run under-performance of Finnish IPOs can be largely explained by size, book-to-market, and momentum effects.

Keywords: initial public offerings, underpricing, long-run performance, value, growth

JEL Classification: G10, G11, G14, G15

Suggested Citation

Hahl, Teemu and Vähämaa, Sami and Äijö, Janne Jaakko, Value versus Growth in IPOs: New Evidence from Finland (October 2, 2013). Research in International Business and Finance, Vol. 31, No. 1, pp. 17-31., Available at SSRN: https://ssrn.com/abstract=2261146 or http://dx.doi.org/10.2139/ssrn.2261146

Teemu Hahl

SEB Group ( email )

Stockholm
Sweden

Sami Vähämaa (Contact Author)

University of Vaasa ( email )

P.O. Box 700
Vaasa, FI-65101
Finland
+358 29 449 8455 (Phone)

HOME PAGE: http://www.uwasa.fi/~sami

Janne Jaakko Äijö

University of Vaasa, Department of Accounting and Finance ( email )

P.O. Box 700
FIN-65101 Vaasa
Finland

HOME PAGE: http://www.uwasa.fi/~jja

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