This paper surveys some effective factors on long-term and short-term returns of initial public offerings (IPO) of public and private companies in Tehran Stock Exchange (TSE) market. We use panel data approach to compare determinant factors of returns of IPO either in public and private firms. The results show that P/E ratio, volume of transactions and size of companies are the main factors of determinant of abnormal long-run returns of IPO in both private and public companies. In the short-run, the IPO’s returns of private enterprises related to size, and volume of transaction. Although in the public companies, size, P/E and individual firm’s specification are the determinants of short-run IPO’s returns. Results of research pointed to conclusion that the corporate ownership has no significant impact on returns of IPO in short-run and long-run. And both private enterprises and public companies might retain the profit and release the loss by set share retention/offering rate and over/under pricing of IPO companies.
Abdou, K., & Dicle, M. (2007). Do risk factors matter in the IPO valuation? Journal of Financial Regulation and Compliance., 15, 63-89.
Abhyankar, A., Chenb, H.-C., & Ho, K.-Y. (2006). The long-run performance of initial public offerings: Stochastic dominance criteria. The Quarterly Review of Economics and Finance, 620–637.
Agatheea, U., Sannasseea, R., & Brooks, C. (2012). The underpricing of IPOs on the Stock Exchange of Mauritius. Research in International Business and Finance, 281– 303.
Bessler, W., & Thies, S. (2007). The long-run performance of initial public offerings in Germany. Managerial Finance, 33, 420-441.
Brada, J., & Ma, C.-Y. (2007). The optimal timing of initial public offerings in the course of privatization: Theory and an illustrative application. Economic Systems, 121–137.
Bradley, D., Cooney, J., Jordan, B., & Singh, A. (2004). Negotiation and the IPO offer price: A comparison of integer versus noninteger IPOs. Journal of Financial and Quantitative and Analysis, 517- 540.
Burrowes, A., Feldmann, H., & Feldmann, M. (2004). An Examination of Underperformance and Liquidity of Initial Public Offerings by High Growth Stocks on the German Neuer Markt. Managerial Finance, 30, 92-117.
Chana, K., Wangb, J., & John Weia, K. (2004). Underpricing and long-term performance of IPOs in China. Journal of Corporate Finance, 409– 430.
Chemmanur, T., & Paeglis, I. (2005). Management quality,certification,and initial public offerings. Journal of Financial Economics, 331–368.
Chen, Z., & Wilhelm Jr., W. (2008). A theory of the transition to secondary market trading of IPOs. Journal of Financial Economics 90(2008), 219–236.
Cheung, Y.-l., Ouyang, Z., & Tan, W. (2009). How regulatory changes affect IPO underpricing in China. China Economic Review, 692–702.
Chia, J., & Padgett, C. (2005). Short-run underpricing and its characteristics in Chinese initial public offering (IPO) markets. Research in International Business and Finance, 71–93.
Chorruk, i., & Worthington, A. (2010). New evidence on the pricing and performance of initial public offerings in Thailand. Emerging Markets Review, 285–299.
Durukan, M., & Yerleskesi, K. (2002). The Relationship Between IPO Returns and Factors Influencing IPO Performance: Case of Istanbul Stock Exchange. Managerial Finance, 28, 18-38.
Fama, E. (1998). Market efficiency, long-term returns, and behavior finance. Journal of Financial Economics, 49, 283–306.
Fukugawa, N. (2012). Impacts of intangible assets on the initial public offering of biotechnology startups. Economics Letters, 83–85.
Goergen, M., & Renneboog, L. (2007). Does ownership matter? A study of German and UK IPOs. Managerial Finance, 33, 368-387.
Gompers, P., & Lerner, J. (2003). The really long-run performance of initial public offerings: the pre-Nasdaq evidence. J. Journal of Finance, 58(4), 1355–1392.
Grammenos, C., & Papapostolou, N. (2012). US shipping initial public offerings: Do prospectus and market information matter? Transportation Research Part E, 276–295.
Greene, W. (2003). Econometric Analysis (5 ed.). Upper Saddle River: Prentice Hall.
Hausman, J. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251-1271.
Jones, T., & Ligon, J. (2009). The day of the week effect in IPO initial returns. The Quarterly Review of Economics and Finance, 110–127.
Kea, M.-C., Liaob, T., & Hsuc, H.-M. (2007). Some new evidence on bond initial public offerings in the Taiwan Stock Exchange: An industrial perspective. Physica A, 357–373.
Kenourgios, D., Papathanasiou, S., & Rafail Melas, E. (2007). Initial performance of Greek IPOs, underwriter’s reputation and oversubscription. Managerial Finance, 33, 332-343.
Kirkulak, B. (2008). The initial and long-run returns of Japanese venture capital-backed and non-venture capital-backed IPOs. International Journal of Managerial Finance, 4, 112-135.
Li, M., Zheng, S., & Melancon, M. (2005). Underpricing, share retention, and the IPO aftermarket liquidity. International Journal of Managerial Finance, 2, 76-94.
Loughran, T., & Ritter, J. (2004). Why Has IPO Underpricing Changed Over Time? Financial Management, 5 - 37.
Lowry, M., & Shu, S. (2002). Litigation risk and IPO underpricing. Journal of Financial Economics, 309–335.
Marisettya, V., & Subrahmanyam, M. (2010). Group affiliation and the performance of IPOs in the Indian stock market. Journal of Financial Markets, 196–223.
Mitchell, M., & Stafford, E. (2000). Managerial decisions and long-term stock price performance. Journal of Business, 73, 287–329.
Moshirian, F., Ng, D., & Wu, E. (2010). Model specification and IPO performance: New insights from Asia. Research in International Business and Finance, 62–74.
Ritter, J. (1998). Initial Public Offerings. In W. Gorham , & Lamont, Handbook of Modern Finance (pp. 5-30). University of Florida.
Ritter, J., & Welch, I. (2002). A review of IPO activity, pricing and allocations. Journal of Finance, 57(4), 1795–1828.
Roosenbooma, P., & Goot, T. (2005). The effect of ownership and control on market valuation: Evidence from initial public offerings in The Netherlands. International Review of Financial Analysis, 43– 59.
Vong, A., & Trigueiros, D. (2010). The short-run price performance of initial public offerings in Hong Kong: New evidence. Global Finance Journal, 253–261.
Wu, C., & Kwok, C. (2007). Long-run performance of global versus domestic initial public offerings. Journal of Banking & Finance, 609–627.
Yip, Y., Su, Y., & Ang, J. (2009). Effects of underwriters, venture capital and industry on long-term initial public offering performance. Managerial Finance, 35, 700-715.
Copyright: © 2013 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
