Long-Run Performance of Initial Public Offerings: The Evidence for Switzerland

Wolfgang Drobetz, Matthias Kammermann and Urs Wälchli
Authors registered in the RePEc Author Service: Urs Waelchli ()

Schmalenbach Business Review (sbr), 2005, vol. 57, issue 3, 253–275

Abstract: We estimate the underpricing and long-run performance of Swiss initial public offerings (IPOs) from 1983 to 2000. The average market adjusted initial return is 34.97%. To examine the long-run performance of Swiss IPOs, we compute buy-and-hold abnormal returns, skew-ness-adjusted wealth ratios, and cumulative abnormal returns using 120 months of secondary market returns. In contrast to previous findings for the U.S. and Germany, we do not find strong evidence for a distinct IPO effect. We attribute long-run underperformance to the fact that IPO firms tend to be small firms. It virtually vanishes when we use a small capitalization index as a benchmark. In spite of distinct economic implications and statistical properties, our basic results are similar for all performance measures applied.

Keywords: Initial Public Offerings; Long-Run Stock Performance; Market Efficiency; Swiss Stock Market; Underpricing. (search for similar items in EconPapers)
JEL-codes: G12 G14 G24 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:sbr:abstra:v:57:y:2005:i:3:p:253-275

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