Democracy and the pricing of initial public offerings around the world

Duong, Huu Nhan and Goyal, Abhinav and Kallinterakis, Vasileios and Veeraraghavan, Madhu (2021) Democracy and the pricing of initial public offerings around the world. Journal of Financial Economics. pp. 1-20. ISSN 0304-405X

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We find a negative relation between democracy and initial public offering (IPO) underpric�ing for a sample of 23,050 IPOs across 45 countries. The effect of democracy on underpric�ing 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 institu�tional 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

Item Type: Article
Uncontrolled Keywords: Democracy IPO underpricing Information asymme tryCorporate governance
Subjects: Finance
Finance > Financial Economics
Divisions: Finance and Strategy
Depositing User: Mr. Muralidhara D
Date Deposited: 30 Sep 2021 04:30
Last Modified: 30 Sep 2021 04:30

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