Underpricing of Western European IPOs: An Empirical Analysis

Benjamin Zokaie Julseth & Markus Halvorsen Sunde

Student thesis: Master thesis


This master thesis investigates 1335 IPOs based in Western Europe, in the period 1st January 2001 to 1st January 2021. The focus in the thesis is the well-known IPO underpricing puzzle, which has been debated for a long time. The thesis aims to see what effects underpricing of IPOs in Northwestern and Southwestern Europe, see if there are any differences in the underpricing between the two regions, and see if the underpricing has changed after the financial crisis. Based on earlier theories, we have developed ten propositions related to ex-ante uncertainty, Signalling effect, asymmetric information, economics, certification effects, and ownership incentives. Our findings show there is a difference in the underpricing of the two regions. We have also tested different theories explaining the degree of underpricing. We could not determine the effect the financial crisis had on IPO underpricing in the two regions

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
Publication date2021
Number of pages125