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Signalling and the Long‐run Performance of Spanish Initial Public Offerings (IPOs)

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  • Susana Álvarez
  • Víctor M. González

Abstract

Academic research into firms that have gone public has focused on the study of two anomalies: initial underpricing and long‐run underperformance. We analyse Spanish Initial Public Offerings to provide additional evidence on the long‐run performance of IPOs and its relationship with initial underpricing. Results reveal the existence of negative long‐run abnormal stock returns, in line with the international literature. Long‐run performance presents a positive relationship with underpricing and the volume of funds obtained in seasoned offerings, in consonance with the predictions of Allen and Faulhaber (1989), Welch (1989) and Grinblatt and Hwang (1989).

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  • Susana Álvarez & Víctor M. González, 2005. "Signalling and the Long‐run Performance of Spanish Initial Public Offerings (IPOs)," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(1‐2), pages 325-350, January.
    • Handle: RePEc:bla:jbfnac:v:32:y:2005:i:1-2:p:325-350
    DOI: 10.1111/j.0306-686X.2005.00596.x
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    Cited by:

    1. Jog, Vijay & Otchere, Isaac & Sun, Chengye, 2019. "Does the two-stage IPO process reduce underpricing and long run underperformance? Evidence from Chinese firms listed in the U.S," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 59(C), pages 90-105.
    2. Charles Ka Yui Leung & Edward Chi Ho Tang, 2015. "Speculating China Economic Growth through Hong Kong? Evidence from Stock Market IPOs and Real Estate Markets," International Real Estate Review, Global Social Science Institute, vol. 18(1), pages 45-87.
    3. Danny Yeung, 2012. "The Impact of Institutional Ownership: A Study of the Australian Equity Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 2-2012.
    4. Hahl, Teemu & Vähämaa, Sami & Äijö, Janne, 2014. "Value versus growth in IPOs: New evidence from Finland," Research in International Business and Finance, Elsevier, vol. 31(C), pages 17-31.
    5. ap Gwilym, Owain & Verousis, Thanos, 2010. "Price clustering and underpricing in the IPO aftermarket," International Review of Financial Analysis, Elsevier, vol. 19(2), pages 89-97, March.
    6. Nguyen Van Tan & Ninh Thi Trang, 2023. "The long-run performance of initial public offerings: evidence from a transition economy," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 13(5), pages 574-591.
    7. Janice CY How & Kian Ngo & Peter Verhoeven, 2011. "Dividend initiations and long-run IPO performance," Australian Journal of Management, Australian School of Business, vol. 36(2), pages 267-286, August.
    8. Danny Yeung, 2012. "The Impact of Institutional Ownership: A Study of the Australian Equity Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 11, July-Dece.

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