 Does culture influence IPO underpricing?Bruce A. Costa, Anthony Crawford and Keith Jakob Journal of Multinational Financial Management, 2013, vol. 23, issue 1, 113-123 Abstract: This paper examines how cultural differences influence cross-sectional variation in IPO underpricing across 39 countries. We conjecture that cultural difference across geographic boundaries will influence the acceptance of and the expectations for IPO underpricing. Cross-sectional differences in culture are measured using Hofstede's six cultural dimensions. Our analysis shows that high power distance and high long term orientation are significantly associated with higher IPO underpricing. We also show that underpricing is significantly lower in countries characterized by high uncertainty avoidance. When the model is expanded to include legal origin, market based and corporate governance variables, the three cultural factors remain significant. Our findings provide further evidence that culture impacts capital market returns. Overall, our finding that culture impacts IPO underpricing, suggests important implications for policy makers and investors. Keywords: IPO; Cultural factors; Underpricing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:23:y:2013:i:1:p:113-123 DOI: 10.1016/j.mulfin.2012.12.001 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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