TY - JOUR
T1 - Societal secrecy and IPO underpricing
AU - Chen, Yangyang
AU - Chui, Andy C.W.
AU - Goyal, Abhinav
AU - Veeraraghavan, Madhu
N1 - Funding Information:
We are grateful to an anonymous reviewer, Chuck Kwok, and Xuan Tian (the Editor) for helpful comments and suggestions. We thank Meghana Mohan for excellent research assistance. Veeraraghavan thanks the T A Pai Chair Professorship for funding support. Of course, we remain responsible for any remaining errors.
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/10
Y1 - 2022/10
N2 - We examine how societal secrecy affects the underpricing of initial public offerings (IPOs). Using a large sample of 18,304 IPOs across 38 countries, we find robust evidence that IPO underpricing is positively related to societal secrecy. Additional analyses reveal that investor protection, market openness, and third-party certification moderate the effect of societal secrecy on IPO underpricing. We find that societal secrecy influences IPO underpricing through the information asymmetry, demand for control, and information cascade channels. Collectively, we show that societal secrecy exerts a strong influence on IPO underpricing globally.
AB - We examine how societal secrecy affects the underpricing of initial public offerings (IPOs). Using a large sample of 18,304 IPOs across 38 countries, we find robust evidence that IPO underpricing is positively related to societal secrecy. Additional analyses reveal that investor protection, market openness, and third-party certification moderate the effect of societal secrecy on IPO underpricing. We find that societal secrecy influences IPO underpricing through the information asymmetry, demand for control, and information cascade channels. Collectively, we show that societal secrecy exerts a strong influence on IPO underpricing globally.
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U2 - 10.1016/j.jcorpfin.2022.102257
DO - 10.1016/j.jcorpfin.2022.102257
M3 - Article
AN - SCOPUS:85135844128
SN - 0929-1199
VL - 76
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
M1 - 102257
ER -