Long-run Performance of IPOs: How to Determinate the Performance of IPOs in the Long-run Within the European Market

Kristoffer Hassinggaard Jensen

Student thesis: Master thesis

Abstract

The thesis examines the long-run performance of Initial Public Offerings (IPO) within the Euro- pean Union and test if it is possible to predict long-run performance of IPOs.
The research is based on a data sample of firms going public in the period from 2007 to 2013. Based on a unique data set specifically constructed for this thesis an analysis is conducted of firms going public in a hot and cold market period. Furthermore, the data gives the potential to investigate the significance of different market conditions, industry, and period effects. Also, the specific impact of all predictors probability of obtaining abnormal returns is analysed.
Four main variables; Age, log(Size), ROA, and Underpricing were tested in this research. The empirical results from the statistical test demonstrated that IPO performance is possible to predict, but also that some parameters have a better prediction power, and that some variables have a negative correlation while others have a positive correlation. This master thesis also indicates that firm- and market-specific variables have a significant influence on IPOs long-run performance.

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages160