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The Analysts' Forecast of IPO Firms during the Global Financial Crisis

Author

Listed:
  • Chang-Yi Hsu

    (Department of Industrial and Business Management, Chang Gung University, Taiwan)

  • Jean Yu

    (Department of Banking and Finance, National Chiayi University, Taiwan)

  • Shiow-Ying Wen

    (Department of Industrial and Business Management, Chang Gung University, Taiwan)

Abstract

In this study, we examine the analysts' behavior in the pre-crisis and post-crisis period for IPO firms in the U.S. from 2005 to 2011. By controlling variables size, the proxy of underpricing, the number of the IPO firms and whether the company is listed on NYSE or NASDAQ, we investigate the forecast error of analyst between pre-crisis and post-crisis period for 2008 global financial crisis. The result shows that analysts in our sample are optimistic, and they would become more optimistic after financial crisis. Conservative analysts would emphasize determinants of variables when valuing IPO firms to make their predictions before financial crisis but only consider the prior-year earnings change after financial crisis. Contrarily, analysts more optimistic notice whether the company is listed on NYSE or NASDAQ before crisis but also consider the factors of debt ratio, firm size and the market trends.

Suggested Citation

  • Chang-Yi Hsu & Jean Yu & Shiow-Ying Wen, 2013. "The Analysts' Forecast of IPO Firms during the Global Financial Crisis," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 673-682.
    • Handle: RePEc:eco:journ1:2013-03-10
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    References listed on IDEAS

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    Cited by:

    1. Ferrer, Elena & Santamaría, Rafael & Suárez, Nuria, 2019. "Does analyst information influence the cost of debt? Some international evidence," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 323-342.

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    More about this item

    Keywords

    IPO; Analysts' forecast; Financial crisis;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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