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Global IPO underpricing during the Covid-19 pandemic: The impact of firm fundamentals, financial intermediaries, and global factors

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  • Zhang, Zikai
  • Neupane, Suman

Abstract

We investigate the impact of the Covid-19 pandemic on global IPO underpricing. Using a sample of 6113 IPOs from 32 countries, we find that firms issued during the pandemic have 17.6% more underpricing than those issued before the pandemic. We also analyze the effect of firm fundamentals, financial intermediaries, and global factors on pandemic-era underpricing. Firms with strong fundamentals and backed by reputable underwriters have higher underpricing during the pandemic. Furthermore, better country-level shareholder protection and ESG performance reduce underpricing, while higher economic policy uncertainty increases underpricing during the pandemic. Government economic support positively affected underpricing during the pandemic.

Suggested Citation

  • Zhang, Zikai & Neupane, Suman, 2024. "Global IPO underpricing during the Covid-19 pandemic: The impact of firm fundamentals, financial intermediaries, and global factors," International Review of Financial Analysis, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finana:v:91:y:2024:i:c:s1057521923004702
    DOI: 10.1016/j.irfa.2023.102954
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    More about this item

    Keywords

    Covid-19 pandemic; IPO underpricing; Uncertainty;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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