Distinguishing Quality within the IPO Market

James Ang ； Carol Boyer

《Advances in Investment Analysis and Portfolio Management》 3期 (2008/11) Pp. 63-75

https://doi.org/10.6291/AIAPM.2008.03.04

並列摘要

This study examines how early success in an industry attracts low quality imitators as well as less careful investors. The IPO market is used to illustrate this phenomenon. A longitudinal approach enables one to look at the differences in quality among the firms in terms of their order of entrance into the industry. By chronologically examining IPOs within the same industry, this study reveals how the quality of IPOs, in terms of firm earnings and performance, is related to the stage of the industry's life cycle. This study compares quality characteristics of the first firms that issue an IPO to the quality characteristics of firms that issue IPOs in latter periods after the initial IPOs in the industry have been successfully sold. Stock price performance is used to determine differences in quality between the early, middle and latter entrants from an ex-post standpoint. Holding period returns indicate that the latter entrants have the lowest abnormal returns when compared to those of the early or middle entrants during years one through ten. In the first few years, the early entrants returns are larger than those of the middle and latter entrants.

並列關鍵字

Initial Public Offerings ； Quality

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