Trademark and IPO Underpricing

Posted: 19 Oct 2019 Last revised: 20 Jan 2020

See all articles by Bin Yang

Bin Yang

City University of Hong Kong (CityUHK)

Tao Yuan

Nanjing University - School of Business

Date Written: August 1, 2019


This paper studies the relationship between a firm’s pre-IPO trademarks and its IPO underpricing. Using 4,321 US IPOs during the period 1980-2016, we find that firms with a larger number of trademarks prior to the IPO date experience significantly less IPO underpricing. We employ a quasi-natural experiment brought about by the 1996 Federal Trademark Dilution Act and an instrumental variable approach to establish causality. Our findings suggest that trademarks help reduce information asymmetry among various IPO participants, leading to less underpriced IPOs.

Keywords: trademark; IPO underpricing; information asymmetry; limit attention

JEL Classification: G12, G24, G30, O34

Suggested Citation

Yang, Bin and Yuan, Tao, Trademark and IPO Underpricing (August 1, 2019). Available at SSRN:

Bin Yang

City University of Hong Kong (CityUHK) ( email )

83 Tat Chee Avenue
Hong Kong

Tao Yuan (Contact Author)

Nanjing University - School of Business ( email )

22 Hankou Road
Nanjing, Jiangsu 210093 210093

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