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Asymmetric Information and Underpricing of Initial Public Offerings: Evidence from Croatia

Author

Listed:
  • Domagoj Hru?ka

    (Faculty of Economics and Business, University of Zagreb)

  • Dra?en Milkovi?

    (University Hospital Centre Zagreb)

  • Maja Darabo? Longin

    (Faculty of Economics and Business, University of Zagreb)

Abstract

Information asymmetry between issuing firm, the investment bank and the various classes of investors brings about the problem of Initial Public Offerings (IPO) underpricing. The empirical research determined that the degree of underpricing is dynamic and various markets forces interact simultaneously in observing the variation in pricing the new equity issues. By covering the twelve-year period, this paper gives analytical evidence of underpricing of initial public offerings in Croatia. By identified determinants of IPO underpricing, which are explained with the help of agency theory, signaling and behavioral theories, the paper points out to the significance of regulatory framework in this corporate governance segment.

Suggested Citation

  • Domagoj Hru?ka & Dra?en Milkovi? & Maja Darabo? Longin, 0000. "Asymmetric Information and Underpricing of Initial Public Offerings: Evidence from Croatia," Proceedings of Economics and Finance Conferences 11413248, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:11413248
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    File URL: https://iises.net/proceedings/15th-economics-finance-conference-lisbon/table-of-content/detail?cid=114&iid=007&rid=13248
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    More about this item

    Keywords

    IPO; Croatia; IPO underpricing; corporate governance;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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