Please use this identifier to cite or link to this item: https://rda.sliit.lk/handle/123456789/3166
Title: Under-pricing of South and East Asian IPOs: An investigation of the relevance of governance quality in closely controlled companies
Authors: Alles, L
Murray, L
Keywords: Concentration of control
Developing market IPOs
Governance quality
educed monitoring
South and East Asian markets
Issue Date: 12-Nov-2022
Publisher: Elsevier
Citation: Lakshman Alles, Louis Murray, Journal of Economics and Business, https://doi.org/10.1016/j.jeconbus.2022.106096
Series/Report no.: Journal of Economics and Business;
Abstract: In this paper, we investigate the impact of national governance quality on the under-pricing of initial public offerings (IPOs) in developing South and East Asian equity markets. A significant feature of many listed companies in these markets is the dominant control position of insider shareholders or family groups. We therefore explore the issue of concentrated control when assessing the extent of under-pricing. Concentrated control implies a significant deviation between proportionate ownership and control of company assets. We demonstrate that governance quality is related to IPO under-pricing, contrary to previous research findings on developing markets. This finding is restricted to companies not associated with concentrated control. We use two proxies to identify concentrated control. We initially use the percentage of management control rights. We use company value as an alternative proxy. Our results indicate that the ‘reduced monitoring’ explanation does apply in developing markets, when we allow for the impact of concentrated control.
URI: https://rda.sliit.lk/handle/123456789/3166
ISSN: 01486195
Appears in Collections:Department of Business
Research Papers - Dept of Business

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