Do IPOs matter for price limits? Evidence from Taiwan

Yensen Ni and Paoyu Huang

The Quarterly Review of Economics and Finance, 2015, vol. 58, issue C, 74-83

Abstract: Given that the price limit hit is prominently displayed on the screen of the Taiwan Stock Exchange (TWSE), we explore whether price limits occur in initial public offering (IPO) firms according to the assumption that the sentiments of investors tend to be aroused by firms issuing IPOs and the price limit hit. Results reveal that price limits often occur in IPO stocks. The above phenomena do not only occur during the IPO issuing year, but may also be extended to the following year. We infer that several IPO firms tend to manipulate share prices, especially for technology and high-underpricing IPO firms. The results of this study may be interpreted from the sentiments of investors via the viewpoint of behavioral finance.

Keywords: Price limit; IPO; Investors’ sentiments; Corporate governance; Board structure (search for similar items in EconPapers)
JEL-codes: G24 G28 G34 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:58:y:2015:i:c:p:74-83

DOI: 10.1016/j.qref.2015.01.008

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