Proximity and IPO Underpricing

Ulf Nielsson, Dariusz Wójcik

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Abstrakt

This paper analyses the relationship between issuers' location and IPO underpricing in the U.S. from 1986 to 2014. Issuers headquartered in rural areas are associated with lower underpricing compared to urban firms. This finding is consistent with strong local bias in rural areas accompanied by superior local information, which associates with more accurate pricing and less money left on the table. The paper further finds that refined measures of local bias, such as proximity to finance professionals and density of financial expertise, correlate more with IPO underpricing than proximity to large cities.
OriginalsprogEngelsk
TidsskriftJournal of Corporate Finance
Vol/bind38
Sider (fra-til)92-105
Antal sider14
ISSN0929-1199
DOI
StatusUdgivet - jun. 2016

Emneord

  • IPO underpricing
  • Local bias
  • Proximity

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