Valuation of global IPOs: A stochastic frontier approach

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

Research output: Journal article publicationJournal articleAcademic researchpeer-review

12 Citations (Scopus)


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 languageEnglish
Pages (from-to)267-284
Number of pages18
JournalReview of Quantitative Finance and Accounting
Issue number3
Publication statusPublished - 1 Oct 2007


  • Global offerings
  • Stochastic frontier estimation
  • Valuation efficiency

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting(all)
  • Finance


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