Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55618
Authors: 
Braun, Matías
Larrain, Borja
Year of Publication: 
2006
Series/Report no.: 
Working paper series // Federal Reserve Bank of Boston 06-4
Abstract: 
We show that the introduction of a new asset affects the prices of previously existing assets in a market. Using data from 254 IPOs in emerging markets, we find that stocks in industries that covary highly with the industry of the IPO experience a larger decline in prices relative to other stocks during the month of the IPO. The effects are stronger when the IPO is issued in a market that is less integrated internationally, and when the IPO is big. The evidence supports the idea that the composition of asset supply affects the cross-section of stock prices.
JEL: 
G11
G14
G15
Document Type: 
Working Paper

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