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Title:Underpricing and Index Excess Returns PDF Logo
Authors:Nippel, Peter
Pierdzioch, Christian
Schertler, Andrea
Issue Date:2005
Series/Report no.:Kieler Arbeitspapiere 1259
Abstract:We study the link between underpricing of initial public offerings (IPOs) and index excess returns in secondary markets. We use a theoretical model to argue that underpricing of IPOs raises investors? attention and, thereby, triggers investments in secondary markets. Our theoretical model implies that such investments should give rise to positive index excess returns in secondary markets. The results of our empirical tests, based on a dataset of stocks from the Neuer Markt and the Nouveau Marché, are in line with the implication of our theoretical model.
Subjects:underpricing
index excess returns
IT firms
JEL:N24
G14
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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