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Seasonal darkness and IPO

Author

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  • Gori, Leonella
  • Teti, Emanuele
  • Loi, Andrea
  • Dallocchio, Maurizio

Abstract

This paper analyses the possible relationship between a particular natural phenomenon, the shortening of light hours in autumn, and a financial issue, the level of underpricing recorded on the first day of listing by the companies subject to initial public offering (IPO). It analyses a sample of 3102 IPOs in 32 countries in the period between January 1, 2006, and December 31, 2016. The empirical evidence supports the assumption that seasonal darkness when there is a lack of light, has a positive impact on the raw initial returns of the IPOs made during this period. The results obtained confirm the previous studies aimed at investigating the phenomenon, suggest a possible behavioral interpretation, and in conclusion, make a positive contribution deriving from the large sample size, the consideration of different latitudes, and the assumed perspective.

Suggested Citation

  • Gori, Leonella & Teti, Emanuele & Loi, Andrea & Dallocchio, Maurizio, 2020. "Seasonal darkness and IPO," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 494-508.
    • Handle: RePEc:eee:jeborg:v:178:y:2020:i:c:p:494-508
    DOI: 10.1016/j.jebo.2020.08.003
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