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The performance and the survivorship of New Zealand IPOs

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  • Chi, Jing
  • McWha, Matthew
  • Young, Martin

Abstract

This paper studies the performance and the survivorship of New Zealand IPOs for the period 1991 to 2005. We find that the commonly reported features of IPOs, such as underpricing and underperformance, exist in New Zealand, with the level of underpricing declining in recent years. We find that the operating performance of companies in our sample does not change significantly after listing. Underpricing, size and operating performance are found to influence IPO market performance, while higher risk and new start-up companies have lower operating performance after listing. In relation to survivorship, the majority of delisted firms are merger and acquisition targets rather than failed firms. Interestingly, acquired firms have better market performance and have been operating longer than the surviving firms, while failed firms tend to have higher market volatility, change their management more often, and be issued in the hot market periods.

Suggested Citation

  • Chi, Jing & McWha, Matthew & Young, Martin, 2010. "The performance and the survivorship of New Zealand IPOs," International Review of Financial Analysis, Elsevier, vol. 19(3), pages 172-180, June.
  • Handle: RePEc:eee:finana:v:19:y:2010:i:3:p:172-180
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    References listed on IDEAS

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    Cited by:

    1. Liu, Jia & Lister, Roger & Pang, Dong, 2013. "Corporate evolution following initial public offerings in China: A life-course approach," International Review of Financial Analysis, Elsevier, vol. 27(C), pages 1-20.
    2. Huong Dang & Michael Jolly, 2016. "IPOs in New Zealand: Valuation Multiples and Benchmark Adjusted Performance," Working Papers in Economics 16/32, University of Canterbury, Department of Economics and Finance.

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