The mispricing of transportation initial public offerings in the Chinese mainland and Hong Kong

Kevin Cullinane and Stephen Gong

Maritime Policy & Management, 2002, vol. 29, issue 2, 107-118

Abstract: The main objective of this study is to determine the level of mispricing of transportation IPOs in the Chinese mainland and Hong Kong. A subsidiary objective is to test the hypothesis that there is a strong positive correlation between the initial day returns that are required for new equity issues and the level of ex ante uncertainty associated with the IPO. By applying a standard methodology in finance for assessing the existence and scale of mispricing, the study finds significant underpricing for transportation IPOs in the Chinese mainland and Hong Kong. There is also evidence that freight-related IPOs are subject to more severe underpricing than non-freight related IPOs, and that water-transport IPOs are underpriced more than IPOs of other types of transport business. It is concluded that there does exist support for the hypothesis that the level of ex ante uncertainty is strongly associated with the level of mispricing and that this explains cross-sectional differences in the degree of underpricing of IPOs. In this respect, the results from the Chinese mainland and Hong Kong are consistent with the results of similar studies conducted elsewhere.

Date: 2002
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1080/03088830110067348 (text/html)
Access to full text is restricted to subscribers.

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:taf:marpmg:v:29:y:2002:i:2:p:107-118

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TMPM20

DOI: 10.1080/03088830110067348

Access Statistics for this article

Maritime Policy & Management is currently edited by Dr Kevin Li and Heather Leggate McLaughlin

More articles in Maritime Policy & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().