Does the Pricing Mechanism Affect the IPO Flipping Activity in Pakistan?

• 발행기관: 한국유통과학회
• 저자명: Ayesha ANWAR Rasidah MOHD-RASHID
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.1, 237~246쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.01.30

영문 초록

This paper explores the relationship between price mechanism and flipping activity of initial public offerings (IPOs) in Pakistan’s emerging economy. This study uses a cross-sectional data set of 95 firms listed on Pakistan Stock Exchange from 2000 to 2019. This study employs the ordinary least square and quantile regression techniques to capture the relationship between price mechanism and flipping activity. The results show that book-built IPOs flip substantially less than fixed-price IPOs. This is consistent with the signaling theory assertion that roadshows are arranged by underwriters to capture investors’ demand and set the offer prices of IPOs. If investors learn the fair values of quality IPOs, then the offer prices will be close to the intrinsic values, thus reducing flipping. The findings also provide conclusive evidence for understanding the usefulness of and the more relevant information regarding the pricing mechanism. In particular, it provides a better understanding of how companies actually use the pricing mechanism information in the flipping of IPO shares. The results of this study are also valuable to underwriters, and regulators, for instance, provides underwriters with the discretion to allocate the IPO shares and the SECP, in revising regulation on the disclosure of IPO pricing methods.

목차

1. Introduction

2. Literature Review

3. Data and Sources

4. Results and Discussion

5. Conclusion

References

키워드

Flipping Fixed-Price Mechanism Book-Building Mechanism Pakistan’s IPOs Signaling