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The new issues puzzle revisited: The role of firm quality in explaining IPO returns


  • Magnus Blomkvist

    () (Audencia Business School)

  • Timo Korkeamäki

    () (Hanken School of Economics - Hanken School of Economics)

  • John Pettersson

    (Hanken School of Economics - Hanken School of Economics)


We study the risk and return characteristics of IPOs for to 60 months. After controlling for Asness et al.'s (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks. JEL Classification: G12; G32

Suggested Citation

  • Magnus Blomkvist & Timo Korkeamäki & John Pettersson, 2017. "The new issues puzzle revisited: The role of firm quality in explaining IPO returns," Post-Print hal-01578933, HAL.
  • Handle: RePEc:hal:journl:hal-01578933
    DOI: 10.1016/j.econlet.2017.07.022
    Note: View the original document on HAL open archive server:

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    More about this item


    Firm Quality; IPOs; Long-Run Performance;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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