A Review of IPO Activity, Pricing, and Allocations

Jay Ritter and Ivo Welch

No 8805, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We review the theory and evidence on IPO activity: why firms go public, why they reward first-day investors with considerable underpricing, and how IPOs perform in the long run. Our perspective on the literature is three-fold: First, we believe that many IPO phenomena are not stationary. Second, we believe research into share allocation issues is the most promising area of research in IPOs at the moment. Third, we argue that asymmetric information is not the primary driver of many IPO phenomena. Instead, we believe future progress in the literature will come from non-rational and agency conflict explanations. We describe some promising such alternatives.

JEL-codes: G24 (search for similar items in EconPapers)
Date: 2002-02
New Economics Papers: this item is included in nep-ent
Note: CF
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Citations: View citations in EconPapers (707)

Published as Ritter, Jay R. and Ivo Welch. "A Review Of IPO Activity, Pricing, And Allocations," Journal of Finance, 2002, v57(4,Aug), 1795-1828.

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Journal Article: A Review of IPO Activity, Pricing, and Allocations (2002)
Working Paper: A Review of IPO Activity, Pricing and Allocations (2002)
Working Paper: A Review of IPO Activity, Pricing and Allocations (2002)
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