Investment behaviours and IPO returns: evidence from Taiwan
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 22 (2012)
Issue (Month): 16 (August)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
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: (Michael McNulty)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.