Erschienen in:Review of Quantitative Finance and Accounting, Forthcoming
Umfang:
1 Online-Ressource (42 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2310441
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 15, 2016 erstellt
Beschreibung:
Foreign IPO firms incur higher issuance costs than domestic firms due to greater information asymmetry and ex ante valuation uncertainty. Little is known about how to overcome such liability of foreignness. This study, based on foreign-listed Chinese firms, shows that pre-IPO financing relationship with investors from the country of listing can effectively mitigate cross-border information friction at the time of IPO, and is associated with lower underpricing, smaller underwriting spread and other offering expenses, superior post-IPO stock returns, greater analyst coverage, lower forecast error and dispersion. The benefits of pre-IPO relationship increase in firm-level information asymmetry and the strength of relationship