An Empirical Examination of IPO Underpricing Between High-Technology and Non-High-Technology Firms in Taiwan

Journal of Emerging Market Finance, Forthcoming

43 Pages Posted: 9 Aug 2017

See all articles by Simon Gao

Simon Gao

Edinburgh Napier University

Tony Chieh-tse Hou

National Dong Hwa University

Date Written: July 1, 2017

Abstract

This study investigates the determinants of initial public offering (IPO) underpricing by focusing on variables relating to information asymmetry, investor sentiment, and corporate governance and examines whether the determinants of IPO underpricing in high-technology and non-high-technology IPOs differ. With the data from Taiwan from 2009-2011, this study finds that overallotment is negatively related to underpricing, whereas market momentum, first day trading volume, and managers’ ownership retention rates are positively related to underpricing, particularly for high-technology IPOs. Our results support the signaling hypothesis in high-technology IPOs.

Keywords: High-Tech; Information Asymmetry; Initial Public Offering (IPO); Underpricing; Valuation

JEL Classification: G12; G14; G24; G32

Suggested Citation

Gao, Simon and Hou, Tony Chieh-tse, An Empirical Examination of IPO Underpricing Between High-Technology and Non-High-Technology Firms in Taiwan (July 1, 2017). Journal of Emerging Market Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3014832

Simon Gao

Edinburgh Napier University ( email )

Craiglockhart Campus
Edinburgh, Scotland EH14 1DJ
United Kingdom

Tony Chieh-tse Hou (Contact Author)

National Dong Hwa University ( email )

No. 1, Sec. 2, Da Hsueh Rd.
Shoufeng
Hualien, 97401
Taiwan

HOME PAGE: http://faculty.ndhu.edu.tw/~tonycthou/

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