IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v11y2004i1p5-9.html
   My bibliography  Save this article

IPO underpricing over time: evidence from the UK

Author

Listed:
  • Emre Unlu
  • Stephen Ferris
  • Gregory Noronha

Abstract

The changing nature of initial public offering (IPO) underpricing is examined using a sample of 513 IPOs launched in the UK from 1993 to 2001. It is found that the mean UK underpricing is initially less than that in the USA, reverses itself in the mid-1990s, returns to a lower level during the bubble period, but exceeds US underpricing for the last years of the sample. A growing amount of money left-on-the-table by UK underwriters is also observed. The analysis of IPO characteristics shows the simultaneous presence of changing composition and incentive realignment effects in the UK IPO market. These effects are most evident during the technology/internet equity bubble, which spans the last two subperiods of this study. It is concluded that although the market frenzy of the technology/internet bubble was present in the UK IPO market, its influence appears more limited than that documented for the US.

Suggested Citation

  • Emre Unlu & Stephen Ferris & Gregory Noronha, 2004. "IPO underpricing over time: evidence from the UK," Applied Economics Letters, Taylor & Francis Journals, vol. 11(1), pages 5-9.
  • Handle: RePEc:taf:apeclt:v:11:y:2004:i:1:p:5-9
    DOI: 10.1080/1350485042000187426
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/1350485042000187426&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.

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

    References listed on IDEAS

    as
    1. Carter, Richard B & Manaster, Steven, 1990. " Initial Public Offerings and Underwriter Reputation," Journal of Finance, American Finance Association, vol. 45(4), pages 1045-1067, September.
    2. Tim Loughran & Jay Ritter, 2004. "Why Has IPO Underpricing Changed Over Time?," Financial Management, Financial Management Association, vol. 33(3), Fall.
    3. Beatty, Randolph P & Welch, Ivo, 1996. "Issuer Expenses and Legal Liability in Initial Public Offerings," Journal of Law and Economics, University of Chicago Press, vol. 39(2), pages 545-602, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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:taf:apeclt:v:11:y:2004:i:1:p:5-9. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.