Individual investor’s limited attention and IPO performance

Bing Zhang

Applied Economics, 2019, vol. 51, issue 57, 6089-6099

Abstract: The paper models and verifies the spread and decay of investor’s attention before listing on the stock market by using the Baidu Index as a proxy for investor attention of the frequency of searches. We find that individual investor’s attention has a significant influence on the first-day IPO return. We empirically study the allocation of investor attention among several stocks and discover that the more stocks going public on the same day, the milder and more similar their performance tends to be. This paper is the first to research IPO performance and individual attention.

Date: 2019
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DOI: 10.1080/00036846.2019.1646404

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