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Decisions of Initial Public Offering Review Committees: Causes and Consequences

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  • Pei-Gi Shu
  • Yin-Hua Yeh
  • Yu-Hui Su

Abstract

We investigate the causes and consequences of the decisions made by an initial public offering (IPO) reviewing committee using a unique data set from Taiwan. Firms that were approved for listing are associated with better financial performance measures and are larger in equity size. Whether the committee unanimously approves an IPO firm depends on whether the firm's associated auditor changes or gives a nonunqualified report. The voting outcome has a discernable effect in the sense that unanimously approved firms are associated with higher financial performance measures (returns on equity, returns on assets, earnings per share, and the price-to-earnings ratio) than are nonunanimously approved firms, with the differences being more significant in the two years after the IPO.

Suggested Citation

  • Pei-Gi Shu & Yin-Hua Yeh & Yu-Hui Su, 2009. "Decisions of Initial Public Offering Review Committees: Causes and Consequences," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 45(3), pages 67-82, May.
    • Handle: RePEc:mes:emfitr:v:45:y:2009:i:3:p:67-82
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    Keywords

    IPO reviewing committee;

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