IDEAS home Printed from https://ideas.repec.org/a/taf/apfiec/v22y2012i16p1385-1394.html
   My bibliography  Save this article

Investment behaviours and IPO returns: evidence from Taiwan

Author

Listed:
  • Jin-Ying Wang

Abstract

This article uses Buy-Sell Imbalance (BSI) as an indicator of investment behaviour to analyse the correlation between investor trading behaviours and returns of Initial Public Offerings (IPOs). After controlling for variables, such as market excess return, the size factor, and the book-to-market factor and momentum factor, this article finds that if IPOs are more popular to individual investors when issuing, the short-term returns are higher. In contrast, there is little sign that institutional investors exhibit such effect. In Taiwan's stock market where individual investors are the dominant players, the investment behaviours of individual investors exhibit certain influences on IPO share prices. This article also divides the IPO samples into two groups, one group favoured by investors and the other not at the time of issue. The result shows that IPOs favoured by individual investors have significantly lower long-term returns after 1 year of their listings, while IPOs favoured by institutional investors have different results. The two groups show no significant differences in average operational performances; therefore, this article suggests that the price correction of overly optimistic individual investors is the reason for the poorer long-term returns of IPOs favoured by individual investors.

Suggested Citation

  • Jin-Ying Wang, 2012. "Investment behaviours and IPO returns: evidence from Taiwan," Applied Financial Economics, Taylor & Francis Journals, vol. 22(16), pages 1385-1394, August.
  • Handle: RePEc:taf:apfiec:v:22:y:2012:i:16:p:1385-1394
    DOI: 10.1080/09603107.2012.657350
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09603107.2012.657350
    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.

    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:apfiec:v:22:y:2012:i:16:p:1385-1394. 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/RAFE20 .

    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 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.

    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.