IPO pricing: Do institutional and retail investor sentiments differ?

Shenghao Gao, Qingbin Meng and Kam C. Chan

Economics Letters, 2016, vol. 148, issue C, 115-117

Abstract: We study the impact of institutional and retail investor sentiments on first day and long-term IPO return using a sample of Chinese IPOs. The mandatory disclosure of institutional investor bidding information in the book-building process allows us to directly separate institutional investor sentiment from those of retail investors’. Our findings suggest: (1) both institutional and retail investor sentiments are positively correlated with the first day IPO return; and (2) only retail investor sentiment is negatively correlated with long-term IPO performance.

Keywords: Earnings management; IPO; China (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:148:y:2016:i:c:p:115-117

DOI: 10.1016/j.econlet.2016.09.029

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