The influence of underwriter reputation, keiretsu affiliation, and financial health on the underpricing of Japanese IPOs
Document Type
Article
Date of Original Version
11-1-2001
Abstract
This research examines initial public offering (IPO) underpricing in Japan between 1980 and 1998. Consistent with prior research, we find no evidence that underwriter reputation influences the level of mispricing. Keiretsu-affiliated firms are more fully priced, though healthy firms and healthy keiretsu-affiliated firms are significantly more underpriced, than are other firms. The mispricing of healthy firms occurs prior to implementation of the discriminatory price auction system and is consistent with a high demand for these IPO firms. Reduced mispricing of keiretsu firms during the post-auction period is consistent with the notion that they have more stable earnings than other firms. © 2001 Elsevier Science B.V.
Publication Title, e.g., Journal
Pacific Basin Finance Journal
Volume
9
Issue
5
Citation/Publisher Attribution
Beckman, Judy, Jacqueline Garner, Beverly Marshall, and Hideo Okamura. "The influence of underwriter reputation, keiretsu affiliation, and financial health on the underpricing of Japanese IPOs." Pacific Basin Finance Journal 9, 5 (2001): 513-534. doi: 10.1016/S0927-538X(01)00026-9.