IPOs, clustering, indirect learning and filing independently

Hugh M.J. Colaco, Chinmoy Ghosh, John D. Knopf and John L. Teall

Journal of Banking & Finance, 2009, vol. 33, issue 11, 2070-2079

Abstract: IPO underpricing has been attributed to valuation uncertainty, which can be at least partially resolved by the indirect learning associated with IPO clustering [Benveniste, L.M., Ljungqvist, A., Wilhelm, W.J., Yu, X.Y., 2003. Evidence of information spillovers in the production of investment banking services. Journal of Finance 58, 577-608]. We examine why firms might choose not to issue their IPOs contemporaneously with clusters of similar firms, forgoing opportunities to learn from their peers. We find that the willingness to file an IPO without the benefit of indirect learning from peer firm IPOs is directly related to insiders' needs for portfolio diversification and the firm's need to raise capital.

Keywords: IPO; Underpricing; Underwriter; Learning (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:33:y:2009:i:11:p:2070-2079

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