Ownership dispersion, costly information, and IPO underpricing

• 成果类型: Article
• 署名作者: Booth, JR; Chua, L
• 署名单位: University of Hawaii System
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/0304-405X(95)00862-9
• 发表日期: 1996
• 页码: 291-310
• 关键词: initial public offerings; Underpricing; ownership dispersion; information cost

摘要

We develop an explanation for IPO underpricing in which the issuer's demand for ownership dispersion creates an incentive to underprice. Promoting oversubscription allows broad initial ownership, which in turn increases secondary-market liquidity. Increased liquidity reduces the required return to investors. Broad initial ownership, however, requires an increase in investor-borne information costs. These information costs are offset through initial underpricing. Empirical results are consistent with initial underpricing reflecting the level of ownership dispersion.