Clustering and discounting in auction-style SEOs – Evidence from China

Jinzhao Liu, Shenghao Gao and Jun Zhou

Pacific-Basin Finance Journal, 2019, vol. 57, issue C

Abstract: This study examines the clustering and discounting of offer prices in auction-style seasoned equity offerings (SEOs) in China. More importantly, using a unique dataset of detailed bidding data submitted by participating investors in SEOs using the uniform-price auction mechanism, we document the clustering of bid prices at integers, and find that the clustering and discounting of integer bid prices drive the clustering and discounting of integer offer prices. Further, we find evidence that bid prices tend to cluster at integers for SEOs with higher uncertainty, and the larger bid discounts associated with integer bids can be explained by bid shading.

Keywords: SEO; Price clustering; SEO discount; Bid discount; Bid shading (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X18306048
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x18306048

DOI: 10.1016/j.pacfin.2019.101197

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().