Democracy and the pricing of initial public offerings around the world

• 成果类型: Article
• 署名作者: Duong, Huu Nhan; Goyal, Abhinav; Kallinterakis, Vasileios; Veeraraghavan, Madhu
• 署名单位: Monash University; University College Cork; University of Liverpool
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.07.010
• 发表日期: 2022
• 页码: 322-341
• 关键词: Democracy; IPO underpricing; information asymmetry; corporate governance

摘要

We find a negative relation between democracy and initial public offering (IPO) underpricing for a sample of 23,050 IPOs across 45 countries. The effect of democracy on underpricing is weaker for IPOs audited by Big 4 auditing firms, backed by venture capital firms, and with better disclosure specificity of use of proceeds. Democracy exerts a larger influence on underpricing for firms with higher agency problems, in countries with weaker institutional quality or shareholder protection, and during periods of high investor sentiment or economic policy uncertainty. Overall, our results highlight the importance of democracy in reducing IPO underpricing around the world. (c) 2021 Elsevier B.V. All rights reserved.