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Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market

Received: 31 July 2013     Published: 20 August 2013
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Abstract

This paper studies the aftermarket stock performance of IPOs in short-run and long-run, and examines whether the long-run underperformance exists in Taiwan stock market. This paper applies the measure of expected skewness to verify that the highly expected skewed IPO firms are overpriced and experience the long–run underperformance. We find that IPO firms are underpriced 48.54% and severely underperform from three to five years in comparison to the reference portfolios. Skewness is reported to be positively related with the underpricing level of the first day. However, our findings suggest that this skewness measure can’t explain for the long-run phenomenon of IPOs.

Published in Journal of Finance and Accounting (Volume 1, Issue 2)
DOI 10.11648/j.jfa.20130102.12
Page(s) 32-40
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

IPO, Aftermarket Performance, Expected Skewness

References
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Cite This Article
  • APA Style

    Yue-Fang Wen, Minh Huong Cao. (2013). Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market. Journal of Finance and Accounting, 1(2), 32-40. https://doi.org/10.11648/j.jfa.20130102.12

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    ACS Style

    Yue-Fang Wen; Minh Huong Cao. Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market. J. Finance Account. 2013, 1(2), 32-40. doi: 10.11648/j.jfa.20130102.12

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    AMA Style

    Yue-Fang Wen, Minh Huong Cao. Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market. J Finance Account. 2013;1(2):32-40. doi: 10.11648/j.jfa.20130102.12

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  • @article{10.11648/j.jfa.20130102.12,
      author = {Yue-Fang Wen and Minh Huong Cao},
      title = {Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market},
      journal = {Journal of Finance and Accounting},
      volume = {1},
      number = {2},
      pages = {32-40},
      doi = {10.11648/j.jfa.20130102.12},
      url = {https://doi.org/10.11648/j.jfa.20130102.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20130102.12},
      abstract = {This paper studies the aftermarket stock performance of IPOs in short-run and long-run, and examines whether the long-run underperformance exists in Taiwan stock market. This paper applies the measure of expected skewness to verify that the highly expected skewed IPO firms are overpriced and experience the long–run underperformance. We find that IPO firms are underpriced 48.54% and severely underperform from three to five years in comparison to the reference portfolios. Skewness is reported to be positively related with the underpricing level of the first day. However, our findings suggest that this skewness measure can’t explain for the long-run phenomenon of IPOs.},
     year = {2013}
    }
    

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    T1  - Short-Run and Long-Run Performance of IPOs: Evidence from Taiwan Stock Market
    AU  - Yue-Fang Wen
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    DO  - 10.11648/j.jfa.20130102.12
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
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    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20130102.12
    AB  - This paper studies the aftermarket stock performance of IPOs in short-run and long-run, and examines whether the long-run underperformance exists in Taiwan stock market. This paper applies the measure of expected skewness to verify that the highly expected skewed IPO firms are overpriced and experience the long–run underperformance. We find that IPO firms are underpriced 48.54% and severely underperform from three to five years in comparison to the reference portfolios. Skewness is reported to be positively related with the underpricing level of the first day. However, our findings suggest that this skewness measure can’t explain for the long-run phenomenon of IPOs.
    VL  - 1
    IS  - 2
    ER  - 

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Author Information
  • Department of Applied Economics and Management, Ilan University, Ilan City, Taiwan

  • Department of Applied Economics and Management, Ilan University, Ilan City, Taiwan

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