Competitive valuation effects of Australian IPOs

McGilvery, Andrew, Faff, Robert and Pathan, Shams (2012) Competitive valuation effects of Australian IPOs. International Review of Financial Analysis, .

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Author McGilvery, Andrew
Faff, Robert
Pathan, Shams
Title Competitive valuation effects of Australian IPOs
Journal name International Review of Financial Analysis   Check publisher's open access policy
ISSN 1057-5219
Publication date 2012
Sub-type Article (original research)
Total pages 10
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Collection year 2013
Language eng
Abstract This study examines the valuation effects that Australian initial public offerings (IPOs) have on industry competitors and to what extent this can be explained by the IPO firm's corporate governance profile and the intended use of their offer proceeds. Using a sample of 106 IPOs between 1999 and 2009, the results indicate that companies experience negative stock price reactions to the completion of an IPO in their industry on days leading up to and including the event date. The multivariate results show that in relation to corporate governance factors, both board size and CEO share ownership exhibit negative relationships with rival firm abnormal returns. Moreover, IPOs which disclose either investment, or both debt reduction and investment as the intended use of proceeds result in a greater negative price impact upon rival firms.
Keyword Initial public offerings
Corporate governance
Board size
CEO ownership
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Available online 10 August 2012

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2013 Collection
UQ Business School Publications
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Created: Mon, 17 Sep 2012, 19:31:58 EST by Dr Shams Pathan on behalf of UQ Business School