Does ownership concentration play role in IPO underpricing? Evidence from the Finnish IPO market

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School of Business | Bachelor's thesis
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Authors

Date

2018

Department

Rahoituksen laitos

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Mcode

Degree programme

Rahoitus

Language

en

Pages

25

Series

Abstract

Using a sample of 74 Finnish initial public offerings (IPO) from 1997 to 2017 I examined the impact of the post-IPO ownership concentration on initial public offering underpricing. I found insignificantly that there is no relation between ownership concentration and initial returns. Furthermore, I found significantly that stocks with high-level ownership concentration underperform during the first year after IPO refuting the theory of high ownership concentration and high underpricing. I investigated the association by portfolio construction but also by regressions for individual stocks. My results are robust after controlling different ownership concentration measures and matching firm-adjusting.

Description

Thesis advisor

Shin, Sean

Keywords

initial public offering, underpricing, ownership concentration, ownership structure

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https://urn.fi/URN:NBN:fi:aalto-201902171651

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[kand] Kauppakorkeakoulu / BIZ