After-market liquidity and ipos underpricing: evidence from shari'ah and non shari'ah-based firms

Ramli, Ishak and Suherman, Suherman (2010) After-market liquidity and ipos underpricing: evidence from shari'ah and non shari'ah-based firms. Chinese Business Review, 9 (12). pp. 17-26. ISSN 1537-1506

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Abstract

The underpricing of initial public offerings (IPOs) is generally explained with asynunetric information and risk. We complement these traditional explanations with a new theory proposed by Ellul and Pagano (2006) where investors worry also about the after-market illiquidity that may result from asynunetric information after the IPO. The less liquid the after-market is expected to be, the larger will be the IPO underpricing. The samples are the 41 IPOs carried out between 2001-2005. The samples are 7 Shari'ah-based firms. and 34 non Shariah-based firms'. Shariah-based firms are those included in Jakarta Islamic Index (nI), at least one period (one semester). Regression results show that the relationship betwee!l after-market liquidity and underpricing is insignificant unless we use trading frequency as proxy for liquidity for non Shariah-based firms.

Item Type: Article
Uncontrolled Keywords: after-market liquidity; initial public offering; underpricing; Shari'ah-based firms
Subjects: Karya Ilmiah Dosen > Fakultas Ekonomi
Divisions: Fakultas Ekonomi > Akuntansi
Fakultas Ekonomi > Manajemen
Depositing User: Ekonomi FE Tarumanagara
Date Deposited: 07 Aug 2017 18:08
Last Modified: 07 Aug 2017 18:08
URI: http://repository.untar.ac.id/id/eprint/1584

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