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Underpricing and Intellectual Capital Disclosure: Evidence from Indonesia

Wahyu Widarjo, Rahmawati, Bandi and Ari Kuncara Widagdo

Global Business Review, 2020, vol. 21, issue 6, 1325-1337

Abstract: In this study, we investigate the relationship between intellectual capital disclosure and underpricing. We did interviews and gave questionnaires to practitioners and academics to develop intellectual capital disclosure measurement methods (in this case, it is the weighted disclosure index). The analysis result of 189 companies which did initial public offerings in Indonesia during 2000–2014 shows that intellectual capital disclosure affects negatively on underpricing. It indicates that intellectual capital disclosure can reduce asymmetry information between the issuer and the potential investor. In addition, intellectual capital disclosure can assist potential investors in assessing the company’s quality and prospects.

Keywords: Initial public offering; intellectual capital disclosure; underpricing (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1177/0972150919857017

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