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
Date Written: October 2, 2013
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: Suggested Citation