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Esg Ratings And Their Impact On The Underpricing Effect. Comparison Of The European And Us Capital Markets

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  • PETER SCHMUNKAMP

    (Doctoral School of Economics and Business Administration of „Alexandru Ioan Cuza“ University – Iași, Romania)

Abstract

The aim of this paper is to examine the extent to which ESG ratings can influence the underpricing effect. It will be investigated to what extent the level of ESG ratings can have an effect on a rated sample. It will also be investigated whether the existence of a neutral to positive rating in the entire sample can have a significant effect on underpricing. A comparison of two large capital markets (USA and Europe) will also be used to analyze whether there are differences in terms of possible effects. The aim is to make a contribution that can create more transparency on the capital markets. Furthermore, this paper should provide conclusions on different investor behavior on the capital markets. The RepRisk rating of approx. 360 sub-frames is used to determine the influence of these variables on underpricing using linear regression. Control variables are used to take into account influencing factors that have already been researched. The influence of these variables on underpricing is then determined in a linear regression analysis. A comprehensive statement on the question of whether ESG ratings can lead to a reduction of information asymmetries in the IPO process or represent a qualitative signal in the sense of signaling theory.

Suggested Citation

  • Peter Schmunkamp, 2025. "Esg Ratings And Their Impact On The Underpricing Effect. Comparison Of The European And Us Capital Markets," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 35, pages 145-164, June.
    • Handle: RePEc:aic:revebs:y:2025:j:35:schmunkampp
    DOI: 10.47743/rebs-2025-1-0009
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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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