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The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Author

Listed:
  • Magnus Blomkvist

    (Audencia Business School)

  • Timo Korkeamäki

    (Hanken School of Economics - Hanken School of Economics)

  • John Pettersson

    (Hanken School of Economics - Hanken School of Economics)

Abstract

We study the risk and return characteristics of IPOs for to 60 months. After controlling for Asness et al.'s (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks. JEL Classification: G12; G32

Suggested Citation

  • Magnus Blomkvist & Timo Korkeamäki & John Pettersson, 2017. "The new issues puzzle revisited: The role of firm quality in explaining IPO returns," Post-Print hal-01578933, HAL.
    • Handle: RePEc:hal:journl:hal-01578933
    DOI: 10.1016/j.econlet.2017.07.022
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    Citations

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    Cited by:

    1. Dorsaf Ben Aissia & Narjess Skhiri Hellara, 2019. "Systematic risk, the tradeoff of leverage and IPO first-day returns," Review of Quantitative Finance and Accounting, Springer, vol. 53(1), pages 239-256, July.

    More about this item

    Keywords

    Firm Quality; IPOs; Long-Run Performance;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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