The cross-section of European IPO returns

Josef Anton Schuster

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Continental European markets and Sweden during a period characterized by dramatic change. For a sample of 973 IPOs during 1988 and 1998, there is considerable underpricing which is time-varying and related to company characteristics. Much of the large "amounts of money left on the table" is due to privatization issues. For the sample as a whole, IPOs did not underperform in the long-run. Over shorter measurement horizons, we find overperformance. IPO performance is sensitive to market condition at the time of going public and IPO issuing characteristic. The favourable performance for the sample as a whole is driven by New Economy IPOs accounting for 28 percent of the sample. The pervasiveness of the outperformance of New Economy IPOs sheds light on the drivers behind the dramatic shift in industry composition of European IPOs in favor of New Economy IPOs during the "Internet Bubble".

JEL-codes: G30 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2003-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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