Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market
Journal of Finance and Accounting
Volume 1, Issue 2, July 2013, Pages: 32-40
Received: Jul. 31, 2013; Published: Aug. 20, 2013
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Authors
Yue-Fang Wen, Department of Applied Economics and Management, Ilan University, Ilan City, Taiwan
Minh Huong Cao, Department of Applied Economics and Management, Ilan University, Ilan City, Taiwan
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Abstract
This paper studies the aftermarket stock performance of IPOs in short-run and long-run, and examines whether the long-run underperformance exists in Taiwan stock market. This paper applies the measure of expected skewness to verify that the highly expected skewed IPO firms are overpriced and experience the long–run underperformance. We find that IPO firms are underpriced 48.54% and severely underperform from three to five years in comparison to the reference portfolios. Skewness is reported to be positively related with the underpricing level of the first day. However, our findings suggest that this skewness measure can’t explain for the long-run phenomenon of IPOs.
Keywords
IPO, Aftermarket Performance, Expected Skewness
To cite this article
Yue-Fang Wen, Minh Huong Cao, Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market, Journal of Finance and Accounting. Vol. 1, No. 2, 2013, pp. 32-40. doi: 10.11648/j.jfa.20130102.12
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