IDEAS home Printed from https://ideas.repec.org/a/eme/mrrpps/mrr-02-2021-0137.html
   My bibliography  Save this article

Do sponsors and democratic government influence the flipping activity of Pakistan IPO? Evidence from developing market

Author

Listed:
  • Ayesha Anwar
  • Rasidah Mohd-Rashid
  • Norliza Che Yahya
  • Chui Zi Ong

Abstract

Purpose - This study aims to examine the impact of sponsors and democratic government on the flipping activity of initial public offerings (IPOs). Design/methodology/approach - Based on the sample of 95 IPOs listed on the Pakistan Stock Exchange between January 2000 and December 2019, this study used multiple cross-sectional regression to examine the relationship between sponsors and democratic government on flipping activity. Findings - The findings indicate a significant negative association between sponsors and the flipping activity of IPOs. Sponsor(s) signal quality by trying to share accurate information about company values. As a result, the confidence of rational investors in the company’s future prospectus increases and they hold their shares for future gains, which reduces the flipping activity. Also, democratic government, along with sponsors' participation, provides investors with liquidity immediately after listing. Practical limitations/implications - The findings of this study have implications for investors as they may assist them make informed decisions about whether or not to invest in an IPO with high sponsor(s) ownership. In addition, issuers should consider the disclosure of sponsor information(s) as such information may directly affect the first day’s trading volumes. Originality/value - To the best of the authors’ knowledge, this is the first research study that explores the correlation between sponsors and democratic government and flipping activity of IPO. This study is important for investors and issuers.

Suggested Citation

  • Ayesha Anwar & Rasidah Mohd-Rashid & Norliza Che Yahya & Chui Zi Ong, 2021. "Do sponsors and democratic government influence the flipping activity of Pakistan IPO? Evidence from developing market," Management Research Review, Emerald Group Publishing Limited, vol. 45(7), pages 882-896, October.
    • Handle: RePEc:eme:mrrpps:mrr-02-2021-0137
    DOI: 10.1108/MRR-02-2021-0137
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/MRR-02-2021-0137/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/MRR-02-2021-0137/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/MRR-02-2021-0137?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Sponsors; Democratic government; Initial public offerings; Flipping activity; Signalling; Pakistan stock exchange; Developing market; Strategic management; G12; G18; G38;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:mrrpps:mrr-02-2021-0137. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.