Title

Does An Industry Effect Exist For Initial Public Offerings?

Keywords

Competitive effects; Information effects; Initial public offering; Intra-industry effects; IPO

Abstract

We examine the impact of initial public offerings (IPOs) on rival firms and find that the valuation effects are insignificant. This insignificant reaction can be explained by offsetting information and competitive effects. Significant positive information effects are associated with IPOs in regulated industries and the first IPO in an industry following a period of dormancy. Significant negative competitive effects are associated with larger IPOs in competitive industries, those in relatively risky industries, those in high-performing industries, and those in the technology sector. IPO firms that use the proceeds for debt repayment appear to represent a more significant competitive threat to rival firms relative to IPO firms that use their proceeds for other purposes. © 2003 Blackwell Publishing Ltd.

Publication Date

1-1-2003

Publication Title

Financial Review

Volume

38

Issue

4

Number of Pages

531-551

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1111/1540-6288.00059

Socpus ID

33750450137 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/33750450137

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