Valuation of global IPOs: A stochastic frontier approach

Yue Cheong Chan; Congsheng Wu; Chuck C.Y. Kwok

doi:10.1007/s11156-007-0035-x

Valuation of global IPOs: A stochastic frontier approach

Yue Cheong Chan, Congsheng Wu, Chuck C.Y. Kwok

Research output: Journal article publication › Journal article › Academic research › peer-review

12 Citations (Scopus)

Abstract

This paper studies the impact of global offerings on US IPO firms' offer price using the stochastic frontier approach. We find that the offer price valuation efficiency for global IPOs exceeds that of IPOs with purely domestic offers by 3.1%. In particular, the global offering approach is most appropriate to those IPO firms, which offer larger proportion of new shares to international investors, underwritten by less prestigious investment banks and with larger firm-specific return variance. Our findings are consistent with the demand inelasticity, certification effect and investor recognition arguments that account for the benefits of global offering.

Original language	English
Pages (from-to)	267-284
Number of pages	18
Journal	Review of Quantitative Finance and Accounting
Volume	29
Issue number	3
DOIs	https://doi.org/10.1007/s11156-007-0035-x
Publication status	Published - 1 Oct 2007

Keywords

Global offerings
Stochastic frontier estimation
Valuation efficiency

ASJC Scopus subject areas

Accounting
General Business,Management and Accounting
Finance

More information

10.1007/s11156-007-0035-x

Cite this

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Valuation of global IPOs: A stochastic frontier approach

Abstract

Keywords

ASJC Scopus subject areas

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