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FACTORS INFLUENCING THE UNDERPRICING OF INITIAL PUBLIC OFFERINGS IN AN EMERGING MARKET: MALAYSIAN EVIDENCE

International Journal of Economics, Management and Accounting

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Title FACTORS INFLUENCING THE UNDERPRICING OF INITIAL PUBLIC OFFERINGS IN AN EMERGING MARKET: MALAYSIAN EVIDENCE
 
Creator au Abdullah, Nur-Adiana
Taufil Mohd, Kamarun Nisham
 
Description By using 70 initial public offerings (IPOs) in the period 1992 to 1998, it is found that company size, indigenous population ownership and substantial shareholder losses are significant in explaining the variation of IPOs’ underpricing. Large companies are associated with higher discount on their shares to signal their superior future prospects. The unique characteristic of promoting the indigenous population, Bumiputra, to participate in the Malaysian equity market through the government regulatory intervention reduced underpricing. However, such intervention may have contributed to the losses on the part of the substantial shareholders. Surprisingly, Leland and Pyle’s signalling model on entrepreneur’s fractional ownership cannot be supported.JEL classification: G32, G38Key words: IPOs, Underpricing, Regulatory intervention
 
Publisher Kulliyyah of Economics and Management Sciences
 
Date 2013-03-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/102
 
Source International Journal of Economics, Management and Accounting; Vol 12 No 2 (2004)
2462-1420
 
Language eng
 
Relation http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/102/85