IDEAS home Printed from https://ideas.repec.org/a/taf/raaexx/v29y2022i4p964-980.html
   My bibliography  Save this article

Are institutional investors subject to gambling preference? Evidence from detailed investor bids of IPO auctions in China

Author

Listed:
  • Haomin Shen
  • Xiaoke Cheng
  • Lin Han
  • Kam C. Chan

Abstract

Using a unique disclosure database of institutional investor bidding information in Chinese initial public offerings (IPOs), we examine the preference for lottery-like IPO shares of institutional investors. We document that IPOs with higher expected skewness have higher institutional bidding prices and higher offline oversubscription ratio. The effect is stronger for sub-samples with higher investor sentiment and IPOs with higher valuation uncertainty. Moreover, higher expected skewed IPOs experience higher issue prices and initial returns but lower long run returns. These results show that institutional investors have gambling preference for IPO investments and the expected skewness of returns explain institutional bidding prices.

Suggested Citation

  • Haomin Shen & Xiaoke Cheng & Lin Han & Kam C. Chan, 2022. "Are institutional investors subject to gambling preference? Evidence from detailed investor bids of IPO auctions in China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 29(4), pages 964-980, July.
    • Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:964-980
    DOI: 10.1080/16081625.2020.1815549
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/16081625.2020.1815549
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/16081625.2020.1815549?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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:raaexx:v:29:y:2022:i:4:p:964-980. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/raae20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.