Explaining IPOs Underpricing in the Tunisian Market

Nader Naifar

Journal of Emerging Market Finance, 2011, vol. 10, issue 3, 311-336

Abstract: This article tests four hypotheses (signalling, market tendency, market characteristics and the ex ante uncertainty and information asymmetry) to explain the initial public offerings (IPOs) underpricing in the Tunisian market. Most of the empirical studies focus mainly on developed markets and only a few studies analyse the climates of IPOs in emerging markets. The Tunisian business environment is motivating because of the institutional reforms that have been successfully implemented since 1994. The study analyses all the Tunisian IPOs from March 1992 to April 2008 in order to explain underpricing in IPOs. The findings show that IPOs underpricing is mainly explained by the signalling and the market characteristics hypotheses. The phenomenon of underpricing in IPOs is important for portfolio managers who are expected to make optimal (value-maximising) financing choices. Also, results of this study provide insight into the business environment in the case of the Tunisian market.

Keywords: JEL Classification: G1; JEL Classification: G32; IPOs; underpricing; signalling; information asymmetry; ex ante uncertainty (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/097265271101000303 (text/html)

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:sae:emffin:v:10:y:2011:i:3:p:311-336

DOI: 10.1177/097265271101000303

Access Statistics for this article

More articles in Journal of Emerging Market Finance from Institute for Financial Management and Research
Bibliographic data for series maintained by SAGE Publications ().