IPOs, clustering, indirect learning and filing independently

Hugh M.J. Colaco, Chinmoy Ghosh, John Knopf, John Teall

Research output: Contribution to journalArticle

Abstract

IPO underpricing has been attributed to valuation uncertainty, which can be at least partially resolved by the indirect learning associated with IPO clustering [Benveniste, L.M., Ljungqvist, A., Wilhelm, W.J., Yu, X.Y., 2003. Evidence of information spillovers in the production of investment banking services. Journal of Finance 58, 577–608]. We examine why firms might choose not to issue their IPOs contemporaneously with clusters of similar firms, forgoing opportunities to learn from their peers. We find that the willingness to file an IPO without the benefit of indirect learning from peer firm IPOs is directly related to insiders’ needs for portfolio diversification and the firm’s need to raise capital.
Original languageEnglish
Pages (from-to)2070-2079
Number of pages10
JournalJournal of Banking and Finance
Volume33
Issue number11
Early online date13 Jun 2009
DOIs
Publication statusPublished - Nov 2009

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Clustering
Peers
Banking services
Investment banking
Finance
Information spillover
Portfolio diversification
IPO underpricing
Insider
Willingness
Uncertainty

Keywords

  • IPO
  • underpricing
  • underwriter
  • learning

Cite this

Colaco, Hugh M.J. ; Ghosh, Chinmoy ; Knopf, John ; Teall, John. / IPOs, clustering, indirect learning and filing independently. In: Journal of Banking and Finance. 2009 ; Vol. 33, No. 11. pp. 2070-2079.
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IPOs, clustering, indirect learning and filing independently. / Colaco, Hugh M.J.; Ghosh, Chinmoy; Knopf, John; Teall, John.

In: Journal of Banking and Finance, Vol. 33, No. 11, 11.2009, p. 2070-2079.

Research output: Contribution to journalArticle

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