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Underpricing and voluntary disclosure: The case of mining IPOs in Australia

Author

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  • Laura Bottazzi

    (Bologna University and IGIER, Bocconi University)

Abstract

We study the extent to which voluntary disclosure of information in IPO prospectuses of mining companies is associated with lower IPO underpricing. We study the disclosure of information at IPO, looking at the IPO prospectus which is the fundamental document providing investors with information about the company. While its format and main contents are largely fixed by law, there is considerable scope for voluntary disclosure. Mining is a highly capital intensive endeavor and access to equity capital is a key requirement for the development of a mine. We find that the quality of information disclosure, as well as the characteristics of the mining companies, indeed affects underpricing.

Suggested Citation

  • Laura Bottazzi, 2015. "Underpricing and voluntary disclosure: The case of mining IPOs in Australia," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 3(2), pages 18-29, April.
    • Handle: RePEc:lrc:lareco:v:3:y:2015:i:2:p:18-29
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    File URL: http://journalofeconomics.org/index.php/site/article/view/153/202
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    Cited by:

    1. Crain, Nicholas & Parrino, Robert & Srinivasan, Raji, 2021. "Uncertainty, prospectus content, and the pricing of initial public offerings," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 160-182.

    More about this item

    Keywords

    First-day returns; IPOs; Voluntary disclosure.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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