Business, Management and Accounting
4 years ago

Underwriter reputation impacts IPO returns in emerging markets, changing investment landscape.

Topics in Middle Eastern andNorth African Economies
Underwriter Reputation and Short-Run IPO Returns: A Re-evaluation for an Emerging Market
Nuray Güner, Zeynep Önder, Seza Danışoğlu

Paper Summary

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Underwriter reputation does not always affect initial-day IPO returns in emerging markets. However, when considering unique market characteristics, a complex relationship between underwriter reputation and IPO returns is found. Previous studies show that prestigious underwriters are linked to lower IPO underpricing. In emerging markets, positive initial day IPO returns are common, similar to developed markets.